When Newt Gingrich and Mitt Romney aren’t attacking each other for “vulture capitalism” and “bitter envy,” they often deliver sonorous warnings that the Obama administration is driving us toward national insolvency – that we will soon face the same fate as Greece or Italy. These exaggerated predictions of deficit doom are intended to frighten the gullible, with the ultimate aim of achieving drastic cuts of Medicare, Medicaid and Social Security (and possibly the privatization of those programs for profit). But what the Republican candidates never mention a fundamental cause of the fiscal crises in Greece and Italy when proffering false comparisons with the United States: the impressive levels of tax evasion and underground economic activity in those crippled economies.
If anybody is pushing the United States toward the edge of fiscal disaster, it may just be the Republicans in Congress who insist on slashing the Internal Revenue Service operating budget. According to the agency’s internal watchdog, tax evasion — rampant among the one percent, by the way, both here and in Europe — costs the Treasury around $400 billion a year, more than one-sixth of the $2.3 trillion collected. Rather than hire more auditors to ensure that the wealthy pay their share, Congress actually cut the IRS budget in 2011 — and brought us a bit closer to the impecunious state that Romney, Gingrich and all those debt-conscious Republicans supposedly despise.