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The reason I hold the fiscally conservative political beliefs I do has nothing to do with political parties. Really, I could care less if a Democrat or a Republican is in office. I don't hold an allegiance to either of those tribes. What I look for above all is a politician who is economically intelligent. I look for someone who may provide us a way out of the economic mess we are in, someone who will reverse this unsustainable fiscal course we are embarked upon. We are all in this mess collectively, regardless of political stripe, and I don't care where the solution comes from. I just want a solution. Lately, I haven't seen one. Lately, I've only seen politicians arrive on the scene who make things worse. Barack Obama is making our fiscal situation far worse. George W. Bush made our fiscal situation far worse. During the last couple years of his presidency, Bill Clinton and his GOP-led Congress actually made things a little better, however short-lived it turned out to be. As much of the country squares off along lines of left-right tribal warfare like a bunch of ignorant savages, the real threat to the future of America almost always seems to remain unaddressed amidst the partisan smokescreen. We fiddle while Rome burns.
If you think those town hall meetings over health care were fierce, wait until Americans come to understand the threat to our national financial survival posed by the interest on the government's credit card.
When the government spends more than its revenue, there is a budget deficit. These deficits are paid for by Washington selling interest bearing Treasury securities. If the government were ever to default on its promise to pay periodic interest payments or to repay the debt at maturity, the United States economy would plunge into a level of chaos that would make the Lehman bankruptcy look like a nonevent.
It is the interest on the national debt that makes our future unstable. The exploding size of that burden suggests that, short of devaluing the dollar and taking a large bite out of the middle class through inflation and taxation, there is no way to ever pay down that bill.
As of Sept. 30, 2009, the national debt was almost $12 trillion and interest on that debt was $383 billion for the year, according to the Treasury Department's Bureau of the Public Debt. The Congressional Budget Office on Oct. 7 estimated the 2009 budget deficit to be almost $1.4 trillion (about 10% of GDP). In August, the White House Office of Management and Budget (OMB) estimated total government revenues at about $2 trillion. The revenue estimate included $904 billion from individual income taxes. This means the cost of interest on the debt represented more than 40 cents of every dollar that came in from individual income taxes.
Except for a few years in the late 1990s, for decades Washington has spent more than it has taken in each year and borrowed the rest. Taxpayer dollars that could have paid off debt each year have instead been spent on interest to finance debt. Unfortunately, that's a vicious cycle that will likely only get worse.
Imagine that. 40% of our individual income taxes did nothing but pay interest on the federal debt. None of that money paved a road, provided health care, went toward job creation, or helped a single American in any way. That is money we just throw away.
And the only thing our current President has done so far is to make it twice as bad as it was before he arrived on the scene. Get a load of this:
The OMB projects deficits of about $9 trillion over the next 10 years. If that occurs, the national debt will be almost $21 trillion by 2019. However, the actual amount could be much higher. The OMB also optimistically projects $13.5 trillion of revenue increases over the next decade, while minimizing the inevitable rise in interest rates that will come with an expanding national debt.
Forget the political rhetoric, no matter how soaring and inspirational it may sound on the surface. Forget the Democrat vs. Republican horse manure. We are heading for disaster. Look at the actions of our politicians, not the words, not the party. We don't function on hope. We function on a successful economic foundation. That economy is teetering on the brink, and was even before the current recession got under way. Our long term economic forecast would have to get better to be called dismal.
Here is will happen if we don't reverse course immediately, if not sooner.
In stark but simple terms, unless Americans are made aware of this financial crisis and demand accountability, the very fabric of our society will be destroyed. Interest rates and interest costs will soar and government revenues will be devoured by interest on the national debt. Eventually, most of what we spend on Social Security, Medicare, education, national defense and much more may have to come from new borrowing, if such funding can be obtained. Left unchecked, this destructive deficit-debt cycle will leave the White House and Congress with either having to default on the national debt or instruct the Treasury to run the printing presses into a policy of hyperinflation.
Faced with this ever-growing financial house of cards that we call America, what is our government doing ???????
Why, creating ever more social and federal programs we can't afford, of course. Massively EXPANDING the cost of government. The federal government is like Alfred E. Newman of Mad Magazine. "What, me worry ?" Our government is so out of touch that it can't even figure out what the real problem is, or if they do know, they won't admit to it. That would require HARD political choices, and our politicians know you don't get elected by making hard choices, you get elected by pretending to be Santa Claus, giving all the kiddies their presents for free. We don't have statesmen running things, we have carnival barkers. We have propaganda.
Wake up, America. Take your country back. Time is running out, faster than you know.