The general consensus among conservatives seems to be that the recently leaked pre-report from the Debt Commission is a step in the right direction. The incontrovertible evidence sighted is that Nancy Pelosi said that the report was “simply unacceptable.” In most cases that would be enough evidence. However, the fact of the matter is that the Debt Commission Report is fundamentally flawed.
While the report is strewn with Reagan-esque verbiage, it is far from conservative. The underlying problems with the report are: it makes the recent growth in government permanent, and paves the road for massive tax hikes.
The first problem is on the spending side. The Report claims that spending, currently 25% of GDP, has to be reduced. The plan is to get spending to 22% of GDP, and eventually down to 21%. Sounds good, right? Only if you look at government in a post-Obama vacuum. In the post World War II era, government spending has remained between 18-20% of GDP. The plan to get spending ‘in-check’ actually makes concrete the growth in government seen in the Obama era. The proposed reduction in government does not even return government spending to where it was in 2008.
The second major problem is on the revenue side. The Debt Commission has all the language of simplifying that tax code that makes conservatives hearts swoon. However, upon further review, the Report lays the groundwork for enormous tax hikes. An article by Steve Manacek at ricochet.com points out that federal revenues have never reached 21% of GDP, the proposed ‘cap’ in the Report. Even in the darkest days of FDR’s Raw Deal federal revenues did not exceed 20%. A so-called ‘cap’ of 21% would represent the largest share of American wealth the government has ever seized. Rest assured this ‘cap’ will be used by Obama and his allies in the media to justify massive tax hikes. This report will also be used as a bludgeoned to beat Republicans for being ‘irresponsible’ for opposing tax increases.
The futility of this report begs the question: what is the point of these blue-ribbon, bipartisan commissions? Does anybody remember the Iraq Study Group Report? It was the report President Bush rightly ignored when he implemented the surge, which won the Iraq War. The United States does not need bipartisan solutions, it needs common sense conservative solutions.
Here’s a better Debt Commission Report from Larry Kudlow:
By 2015 the [spending] baseline should be lowered by at least $500 billion, if not more…
And there should be a much more aggressive, true, flat-tax reform, with no more than two brackets of 15 and 28 percent, and preferably one bracket somewhere south of 20 percent. Plus, capital gains and dividends, which would go up under the commission, should be abolished altogether, along with the estate tax. And corporate tax reform should have a lower top rate and should include full cash expensing for new investment in plants and equipment.
And finally, to ensure economic growth over the long run, we need a King Dollar currency reform linked to a gold reference point to stabilize and protect the value of our money.
In three paragraphs Kudlow put together a plan for sustainable prosperity. No need for a months-long bipartisan report; use what has worked in the past.
Just in case, here is the Dr. of Democracy breaking down the Debt Commission Report:



