Creighton University economist Ernie Goss doesn’t see Congress solving the nation’s financial problems during the lame-duck session.
Goss expects this Congress to agree to a short-term fix and leave the real work to the next Congress. He says the Congress that convenes in January will face some stark realities.
“This problem is large enough that all of us have to share in, I’ll call it pain, whether that’s higher taxes or spending cuts or a combination of both,” Goss tells Kevin Thomas on Nebraska Radio Network affiliate KLIN’s Drive Time Lincoln.
Goss dismisses suggestions from Washington that higher taxes on the wealthiest Americans will close the deficit gap. He says taxes will have to rise across the board, including taxes the Middle Class pays, to solve the budget deficit.
Goss, though, says just arbitrarily raising taxes isn’t a real solution.
“And what we really need is fundamental tax reform,” according to Goss. “That would be lowering the rates, increasing the breadth of the taxes, meaning we all catch part of that burden, and cutting some of the spending. That’s the solution.”
Goss says the growing federal debt, now topping $16 trillion, is an outgrowth of years of indulgence.
“We’ve under-produced and over-consumed and that’s the problem,” Goss asserts. “Do we really want to burden those, our children and our grandchildren, and make their future less bright that what we’ve enjoyed?”
The nation’s financial picture has moved from a cause for concern closer to an alarm for action. Problems in Europe, according to Goss, provide an illustration of what could happen here if Congress and the White House don’t act.
Goss says the Federal Reserve has been doing what it can to prop up a weak economy by expanding the money supply by $3.5 trillion.
“What we’re faced, if we don’t do something about it, is something like what we’re seeing in Greece. Now, Greece has the disadvantage of not being able to print its own money like our Federal Reserve has been doing. So, what we’re faced with is excessive inflation and higher interest rates if we don’t begin facing up to this issue,” Goss says.
Kevin Thomas, KLIN, contributed to this report.
AUDIO: Creighton University Economist Ernie Goss talks to Kevin Thomas on Drive Time Lincoln. [8:50]