Happy Independence Day!
1898 revenue stamps provided a fresh revenue stream for the US government to pay for the Spanish American War. In the history of the United States, taxes have always been levied to help off-set the costs of conflict, and these added taxes have always been seen and advocated as a patriotic obligation. With the beginning of the wars in Afghanistan and Iraq, the United States did something very different in its history: we cut taxes. Our taxes are lower than they have been in 50 years, yet we are fighting wars in two countries.
There is much bloviating by fatuous politicians about the origins of the US deficit. And while there are many politicians in the United States, there are no statesmen willing to lead us out of our deficit situation in a mature manner. The supposed darling of the Tea Party, Ronald Reagan, would be the Tea Party's ideological enemy today. To quote President Reagan from a 1983 letter to Senate Majority Leader Howard Baker:
The full consequences of a default — or even the serious prospect of default — by the United States are impossible to predict and awesome to contemplate. Denigration of the full faith and credit of the United States would have substantial effects on the domestic financial markets and the value of the dollar.
Revenues need to be raised, with entitlements cut, and some restructured. Even Bob Gates would take a knife to some parts of the defense budget. But instead of dealing with these issues, a ludicrous discussion is taking place. To score political points, some politicians are willing to trash the collective good credit of The United States of America built by generations of Americans. It is time our leaders behave as statesmen and patriots. July 4, 2011, is a good day to start.