S&P, IMF and China, oh my

The economic chickens of spending trillions more than we bring in have
come to roost the past seven days. In the past week, Standard &
Poor’s has downgraded its outlook on U.S. debt, the International
Monetary Fund (IMF) has projected that within five years the U.S. will
cease to be the top economic power in the world and China announced that
it is likely to cut its holdings of U.S. debt.

There couldn’t be a clearer message to stop spending, yet Obama still
doesn’t get it, even with the national debt debate roiling around
Washington …

This weekend, Obama’s radio address relied on the same tired political platitudes — talking about lowering the deficit, while opposing any major cuts. His “tax the rich” scheme is doomed, as IRS data reveals that if Obama took every dollar earned by those in the top 1 percent of income in the U.S., he still would fall short of the $1.65 trillion needed to balance the budget.

Since Obama seems incapable of focusing on the immediate spending cuts the U.S. needs to make in order to have a chance at maintaining our status as the world’s top economic superpower, here are a couple of suggestions that might take care of about 1/3 of the problem:

1.    The IMF believes that we need to cut spending, and what better way to show our commitment to lowering the deficit than by eliminating our commitment to the IMF? This would save the U.S. approximately $160 billion.
   
2.    Sell assets. Just the Tennessee Valley Authority alone, with its extensive electric power generation capacity, 9 million customers and $11 billion in annual revenues, would bring a significant one-time revenue stream to a cash-strapped government while still generating downstream tax revenues.
   
3.    Divest the U.S. government of all of its remaining shares of both GM and Chrysler over the course of the next year. Granted, dumping the shares on the market en masse would diminish their value significantly, but the U.S. needs cash now, and owning parts of two car companies is a luxury that we cannot afford.
   
4. There are many other obvious steps, such as slashing discretionary, non-defense spending by 20 percent, rolling back the eligibility for unemployment insurance to a total of 27 weeks and ending the hidden welfare system of the earned income tax credit by only paying people tax refunds for the amount that they have paid.

Hopefully, taking these steps would give our politicians the breathing room to do the heavy lifting on entitlements that is necessary to put us on a glide path to a balanced budget.

The warning shots have been fired throughout the world. Uncle Sam is teetering on economic disaster. The only question is whether anyone in Washington will be a hero and act to save our country. Anyone?

Rick Manning is the communications director of Americans for Limited Government. Follow him @rmanning957.