I'm sick and tired of hearing our D.C. politicians talking about when it's "okay" to run federal deficits. They all come up with some excuse to do it, or if they pretend to address the issue, they come up with some 5-10 year plan to balance the budget the year AFTER their presidential term ends. Yet, we keep putting these same con men in office over and over. I think it was 2003 when I first heard George W. Bush say it was "okay" to run a deficit (more federal spending than federal revenue) during either a war or a recession. Conveniently for Bush, he inherited a recession and started two wars, so, voila!, he could spend to his heart's delight, and he did, running deficit after deficit. Now, we have both Bush and the Democratic-led Congress jumping on board the deficit train, because we have another, voila!, recession, brought on by the financial crisis. Calling what's going on now in D.C. the "deficit train" is a severe understatement. It's really more like the deficit supersonic jet. After we end up spending a couple trillion beyond our means to fix the financial crisis brought on by living beyond our means (does the word "ironic" even have meaning any more ?), where will we be ? All the same deficit problems we had before will still exist, only worse. The deficits will be much larger. Now, add our two presidential candidates to the mix, Barack Obama (D) and John McCain (R), both of whom's economic plans are projected to add trillions more to the federal deficit in their first term by independent analysts. That means by 2012, our current federal debt of $10 trillion will explode up to $13-14 trillion. And the $53 trillion in unfunded entitlement liabilities will still be there, rolling in like a tsunami to sweep away our country's future.
What will we have accomplished by all this deficit spending ? Not a thing, really, and the destruction of our country, ultimately. And I haven't even got to the inflation part of the equation. All this deficit spending will devalue the dollar much further and result in inflation, stagflation, or whatever kind of -flation you prefer, none of it good for our country, none of it good for our citizens.
Pop question: Who was the last U.S. president to reduce the federal debt during his administration ?
If you said Bill Clinton, that's wrong. He added about $1.4 trillion to the debt during his eight years. He looks good compared to Dubya, who is projected to add around $4.7 trillion to the debt, but Clinton still ran it up, as did Bush I, Reagan, Carter, Ford, Nixon, Johnson, Kennedy, Eisenhower, Truman, and Roosevelt, if my calculations are correct. I can't even answer my own question, because the historical debt tables I found only went back to 1940, and every single administration since that time has added to the federal debt.
With the unfunded entitlement liabilities looming, it appears to me that without significant policy changes, the federal debt will rise geometrically, ultimately destroying the American empire. The current financial crisis will only be the beginning of a much deeper and unrelenting financial crisis.
And McCain is running campaign ads about William Ayers. Obama is running ads about McCain being the same as Bush. Obama pimps CHANGE while ignoring the huge deficit and debt increases his own policies will bring. Ditto for McCain.
Change, my butt. They are BOTH more of the same.
There are only two ways out of the mess we are in. We have to either jack taxes through the roof to pay for all this government spending, or we have to drastically reduce government spending. If we take the tax increase path, we'd have to virtually double our current tax revenue. Doubling taxes is an economy killer of an idea if I ever heard one, so the only viable path out of this is to drastically cut government spending.
Since it appears that the Democrats are going to take over both the Presidency and Congress this election cycle, and will have the power to mostly do whatever they want, let me deal with their plans. Color me more than skeptical that liberal Democratic control will result in anything other than giant government spending increases, along with an additional tax burden on all Americans. If any of you really buy into the "Obama will cut taxes for 95% of Americans" jive, let me remind you of a few things. First, it's really only about 80% that Obama will cut taxes for, and second, about half of those 80% don't pay any income taxes, so what Obama is really proposing for them is welfare, not tax cuts. Third, if you think Obama's little tax cuts are going to stimulate the economy "from the bottom up", as Obama likes to say, you only need to look at the failure of the $150 billion stimulus package that was passed earlier this year. It didn't stimulate anything, and neither will Obama's plan. Only 10-20% of the stimulus money was actually put back into the economy. In order to stimulate the economy, your have to increase private investment and induce business to grow. I'm philosophically in favor of tax cuts for sure, but Obama's tax cuts and his health care plan are really only expansions of the welfare state, and that only leads to MORE government spending, not less. In fact, other than the little middle class tax cut that Obama has devised to get elected, ALL of Obama's plans are for more and more big government. Exactly the wrong path to travel forward for America.
We are in trouble, and there is no relief in sight. We won't get any relief unless we demand it, and we aren't doing that. We are letting the status quo that has given us these enormous financial problems remain.
Soon I'll try to lay out some plans to fix what ails America, the Libertarian way, since it appears neither the Democrats nor the Republicans are up to the task, judging from the evidence I've seen most of my life.
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