Republicans and Democrats alike have flimflammed us, the American people in believing that the government can improve all of our lives if we just give a little more. And when we the people aren't in the mood they take anyway by simply selling off some more debt to the Federal Reserve or to foreign investors and in the process they mortgage us and our progeny.
We are now at the point where our progeny will be paying for the arrogance and greed of the Boomers, The X'ers and Y'ers and who knows what we will call the current generation, for decades to come.
Congress just raised the debt ceiling to 14.6 trillion dollars. We had a budget deficit of 1.2 trillion in 2009 and 2010 is going to have a 1.6 trillion shortfall. Our national debt now represents nearly 85% of our Gross Domestic Product. I am told that when it exceeds 90%, "bad" things are going to happen. This rant however, isn't about what those bad things are. Instead it's a high level view of what it's going to take to start curbing the debt.
Take a look at this chart:
This image is referenced from Wikipedia.
From this graph it is clear that unless Congress is willing to trim back spending in some of the "sacred cows" of the Federal Budget we are going to go the way of Greece. Which is bankruptcy.
The progressives complain that we spend too much on Defense. They have a point. We do spend a lot. But when you look at that graph, you see that we spend more on each of the following: Treasury, which includes interest payments on debt, Health and Human Services and Social Security Administration.
The big four (Treasury, Defense, Health and Human Services and SSA) represent about 80% of the total money spent by the Federal government. Everything else represent only 20% of the budget. If we were to completely shut off spending for everything except the big four, we would roughly break even. That doesn't pay down the debt we owe. We simply wouldn't add any more to it.
We as the American people must be prepared to sacrifice some of our "sacred" entitlements. And some of that may take some time.
Examples:
Social Security was originally intended to be insurance against bad times for those who needed it. It was not an entitlement for all. Americans must once again plan for the future and start saving for their own retirements plans now. And the younger they start, the more likely they won't need to depend on the rest of us when they can no longer work. And in the immediate future, the SSA is going to have to freeze cost increases. Families are going to have to step in and help with their elderly parents and grandparents. 2009 funds spent: $720 billion.
Health and Human Services. Much of the activity under this branch of government isn't even mandated by the U.S. Constitution. Be that as it may, this branch is also going to have to be slashed. On their own website (http://www.hhs.gov/about/whatwedo.html) they state that "HHS represents almost a quarter of all federal outlays". Assuming that cuts CAN'T be made in Medicare and Medicaid (which I don't agree with but for the sake of argument) then we MUST cut the other functions, such as the FDA, Research grants, Head Start, and emergency preparedness. Those functions that can be handled by communities must be. 2009 funds spent: $790 billion.
Defense: Robert Gates did a bold thing when he canceled more purchases of the world's best air-superiority fighter, the F-22 Raptor. In the process, he made a lot of people very angry. Like the Air Force and the good folks who build it. But we need that kind of slashing at every level and in every sector of the defense industry and department. 2009 funds spent: $690 billion.
Since these three departments represent about 65% of the budget, if we were to look at the 2009 budget deficit of 1.2 trillion, that means that we would have had to cut the budgets in these three departments by a combined $780 billion dollars, or roughly $260 billion dollars each.
But don't forget, just slashing these budgets will make things worse. Because to slash these budgets to this level only balances the budget, meaning we aren't adding any more to the public debt. But we still have to REDUCE it. And in the process we would add another 10 million people to the unemployment lines.
So obviously we can't just cut spending. We must raise revenue. There are two ways to do this. We can grow the economy by making our corporate tax rates competitive with other industrialized nations, or we can pay it through income. It will actually be a combination of the two.
America, you must remember that our government is of the people, by the people and for the people. In the final analysis, we let the politicians sham us. But it's our government, and therefore it's our responsibility.
The question is: Do we have the guts to make the hard call? Do we have the guts to force our federal elected representatives and senators to cut the budget where they possibly can? Are we willing to sacrifice our entitlements? Are we willing to start paying on the enormous spending spree debt that we have accumulated over the last forty years? Democrats sure don't have it in them to do that. Republicans could, if they were true to their principles. Tea party people, with their feet on the necks of the Republicans, do they truly understand the level of sacrifice that must be given by every single American to right our financial ship of state? Because let me tell you how it's going to happen.
Congress will slash the federal budget by 900 billion dollars. Conversely, they must raise tax revenues by the same amount to balance the budget. If we make America friendly for manufacturing again... if we make America friendly for business and industry again... we might make it without each taxpayer having to pay an additional 3,500 in taxes EACH YEAR. But unless we can grow the economy while simultaneously tightening our belts we'll never get out of this death-spiral that we're in and the U.S. as we knew it will vanish into the mists of history.
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