Congress breaks, but what about the Bush tax cuts?

The fate of the soon-to-expire Bush cuts remain in limbo as Congress was unable to reach a partisan solution to America's fiscal problem before breaking for a much needed recess.  By and large the debate boils down to two simple arguments.  One side argues that letting the cuts expire is tantamount to a tax hike, something that will cripple an already fragile American economy.  The other side argues if we extend the tax cuts then our deficit problems will mount and exacerbate an already critical situation.  Who is right?

In short, both "solutions" are incorrect even if they correctly illustrate the consequences.  The Democrats just want to get back to the same tax levels as the Clinton years and the Republicans cling to the one economic concept they have learned - tax hikes stifle economic growth.  Yet both seem to forget that spending was substantially lower ten years ago before the tax cuts were implemented.   How much lower?

The projected "disaster" is worth noting (the projected revenue is just a swag and most likely wrong), but focus on the drastic increases in spending, spending that was implemented under a so called conservative Bush administration with a so called conservative Republican Congress.  I digress, but the point remains valid - the issue we need to focus is not on what to do with these tax cuts, but what to do with spending.  Aside from totalitarian thugs that hang around the fringe left side of the Democrat party, most sensible people would prefer to keep taxes low. I would argue that all forms of taxation are oppressive and akin to financial servitude, but you already knew that.  Rather, when our politicians conveniently ignore the radical increases in spending by framing the issue of taxation from the standpoint of deficits.

To be with deficits or not to be?  How about, to be without deficits and be without taxation?  Keep the Bush tax cuts, but return to Clinton's spending levels!   You will quickly see, just looking at the convenient chart that even in the midst of a recession and depressed revenue streams we would have a balanced budget!!

To argue, bemoan and justify anything else is silly.  If you insist on raising taxes to keep up with the runaway spending you will never win.  Ever.  Taxation will eventually stop yielding your projection due to the negative nature of taking away private spending while Federal Reserve inspired bubbles will create booms and busts in tax receipts through unemployment, bankruptcies and economic uncertainty.

As politicians blow hot air on the campaign trail, your task is to hunt down the candidates that promise to reduce spending.  Anything else is either pandering to a voting constituency relying on handouts or fake financial conservatism, the kind of stuff we currently have employed in Washington DC.