This week’s entry in the Don’t-Ask-Questions-You-Don’t-Want-Answered category goes to President Obama:

In an interview with CBS News, Obama again invoked Ronald Reagan as an example of how a president and a Congress controlled by an opposite party can find common ground.

“Ronald Reagan repeatedly took steps that included revenue in order for him to accomplish some of these larger goals. And the question is, if Ronald Reagan could compromise, why wouldn’t folks who idolize Ronald Reagan be willing to engage in those same kinds of compromises?” Obama said.

Independent of the fact that Reagan had more love of his country in his left middle finger than Obama has in his entire marriage, and clearly didn’t hate his political opponents (something that cannot be said of Obama’s allies), when Reagan agreed to tax increases — which he called “revenue enhancements,” bowing to his inner euphemist — it was clear that tax increases were a last resort, not a first option. Recall that two major tax cuts occurred during Reagan’s presidency: the 1981 reduction and then tax reform and simplification in 1986. All that has happened tax-cut-wise in the Obama presidency is the politically expedient extension of the George W. Bush tax cuts to the end of 2012.

And you would have not caught Reagan saying something this monumentally stupid and socialist:

And I do not want, and I will not accept, a deal in which I am asked to do nothing, in fact, I’m able to keep hundreds of thousands of dollars in additional income that I don’t need, while a parent out there who is struggling to figure out how to send their kid to college suddenly finds that they’ve got a couple thousand dollars less in grants or student loans.

Well, Mr. President, if you’re really interested in tax increases, you first. How about taxes on union dues? How about surtaxes on government employee salaries? Why don’t you send your $400,000 paycheck and all your book royalties to the Bureau of the Public Debt? Why don’t you ask your buddies Warren Buffett and Bill Gates Sr. and Jr. to send all of their money to your government?

And as John Steele Gordon replied:

But, unlike Scrooge McDuck, the rich do not put the excess in a vast money bin and frolic about in it. They invest it. What a concept! Where does Obama think new capital comes from, the tooth fairy? It’s nothing more than the excess of income over outgo. Take away the income the rich “don’t need” and spend it on social programs, and capital formation in this country drops to zero.

The nonideological issue around taxes is that taxes unquestionably reduce economic output. (Even the Keynesians agree with that statement.) And you may have noticed that our economy is not exactly robust these days. The federal government has given Americans absolutely no reason to believe that increasing government revenues will result in those revenues’ not being wasted on … well, finish this sentence yourself.

As usually happens during crises, ideas are suggested that are simple yet wrong. The latest related to business is a proposal from a University of Texas professor to tax the market capitalization of public companies:

General Electric Co. paid essentially no tax in 2010. A 35% tax on GE’s economic income would have been $6.8 billion, or $4.7 billion with inflation adjustments. Generally accepted accounting principles and tax accounting allow too much expensing of investments, and ignore predictable future income, the use of tax havens, and accelerated depreciation.

The government can most easily and fairly collect the requisite tax from GE by imposing a tax on the fair market value of its capital. The government can charge GE $6 billion to $7 billion a year for access to public markets and GE and every corporation would be willing to pay that much to give its shareholders access to ready liquidity.

I’m not a tax professor, but all I see out of this proposal (besides a pile of manure as tall as the Texas Tower in that “every corporation would be willing to pay that much” statement) is a powerful inducement to take publicly traded companies private. That would substantially reduce the ability of Americans to buy stock. Regardless of what you think GE’s or any other company’s tax bill should be, any public company that doesn’t try to reduce its taxes is abrogating its fiduciary responsibility to its shareholders. Concerned about concentration of wealth? This proposal is a good way to make it worse.

If Obama’s statements sound disingenuous, they are as disingenuous as his suggestion earlier this week that the next Social Security payments would be suspended without a debt deal. That is necessary neither in the short term nor in the long run. Jim Pethokoukis passes on a Goldman Sachs analysis that shows that the feds will have enough money to fund Social Security, Medicare, defense and interest payments in August.

U.S. Sen. Ron Johnson (R–Wisconsin) pointed out last week that if the federal government does nothing at all, the feds will receive $2.6 trillion in revenue in the 2011–12 fiscal year. That is sufficient to fund all Social Security payments for the next fiscal year, plus about 60 percent of other federal spending. Johnson, an accountant by training (amazing what happens when you elect business people instead of phony maverick gadflies, isn’t it?), likened federal finances to a business bankruptcy reorganization, and he said in the latter situation most creditors would gladly take 60 percent of what they’re owed in the short term.

There is a more interesting question about what would happen in the event of real, substantial federal budget cuts. Too bad David Frum didn’t overstate when he made this argument:

The US government is the largest purchaser of goods and services on planet earth.

The government buys everything from equipment for cancer research to metal for warships to toothpicks for federal cafeterias. Suppose the governmetn had to cut 44% from its budget on 2 weeks notice? How sharp a shock would that be to the world economy?

Here’s a comparative. In the worst quarter of 2009, American consumers cut their spending by … not 44%, not even 4.4%, but 1.2%. That 1.2% drop in consumer spending helped tumble the US economy into the worst collapse since the 1930s. …

If a cut of 1.2% from $10 trillion was an economic shock, a cut of 44% from $3.4 trillion will be a much, much, much bigger shock. …

If it’s right that on Aug. 2, the federal government will have income of $140 billion a month to cover $300 billion of obligations, then we’re going to see some scramble among the creditors, won’t we? …

The response from someone smarter than Frum (or me) about economics, Larry Kudlow:

The public wants deep spending cuts. That’s their first priority and that’s why polls overwhelmingly show opposition to a debt-ceiling increase. So regarding those spending cuts, the only thing that matters is the first-year spending decline. That would be 2012. If the spending baseline is brought down significantly in year one, then the out-years will follow suit. The government’s cost curve will ease down. …

As the congressional negotiators negotiate with President Obama, we the taxpaying public have no idea what they’re cooking up on 2012 spending. It could be a worthwhile reduction or not. Out-year-discretionary decreases and small entitlement cuts for 2019 to 2021 are simply not reliable or credible. Congresses change. Deals are broken. Outcomes are, well, kind of like a scam.

And the public is onto this. The highly accurate IBD/TIPP pollsters have just released an incredible result. Get this: The public rejects a debt-ceiling increase by a huge 58 to 36 percent. That includes 59 percent of independents and even 38 percent of Democrats. That is the Tea Party revolt.

I believe the public agrees with people like Michele Bachmann. She told me in an interview this week that Congress can direct the Treasury to “first pay off the interest on the debt, make sure our military men and women get paid, and then deal with our priorities. Yes, we have very sacrificial consequences, but when are we going to get serious about deficit reduction?”

On this logic, Bachmann and other Tea Party Republicans — including most on the presidential campaign trail — oppose a debt-ceiling increase. This populist spending revolt runs directly counter to the Tim Geithner, Wall Street, big-business view that we must at all costs have a debt-ceiling increase to make good on our federal debt.

Tea Party populists are saying no, no: We can still make good on our debt, but this debt bill is the only leverage we have to force Washington to cut spending.

The other thing that has to happen is identified by Rich Galen:

• Everyone is talking about jobs and tax rates; government spending and entitlements. All symptoms. No one is talking about the cause of the problem: The economy is creaking along barely above water, businesses are frightened, and Americans are uncomfortable buying things because they aren’t sure they will have a job next month.
• Jim Glassman, who is the executive director of the George W. Bush Institute, got it right the other day when he made the case that growing the economy would significantly reduce unemployment (and unemployment benefits) thus increasing tax revenues without increasing tax rates. …
• Rather than chiding the Congress and going for cheap laughs among a press corps held hostage in the briefing room (you don’t laugh at the Presidential jokes, you don’t get called on next time), President Obama should be showing some leadership by utilizing the millions of very smart people in the Executive Branch to figure out how to get this economy moving again.

That would require actual leadership instead of wasting your time figuring out how to score cheap political points against your political enemies. I guess Galen is an optimist.