The US is 5 months into Fiscal Year 2016, and the 2016 Presidential nomination process is moving along quickly. It looks like we may know who the two Big Party candidates will be within just a few months.
Even so, it appears that the candidates, and the “question asking” media have been ignoring one of the economic elephants in the room. I’m referring to the eternal US Budget Deficit, and the National Debt it causes, which are destroying our once great country.
Projected Revenues, at around $3.5 Trillion, are dwarfed by expected Spending of $4.1 Trillion – another $600 Billion of red ink to add to the National Debt. In the current Zero Interest Rate Environment, the interest on the already accumulated $18+ Trillion Debt comes to $283 Billion (about a 1.5% Rate). When rates return to a more normal 5-6%, just the interest on the National Debt will require $1 Trillion – 30% of the Tax Revenue that all Americans pay.
And yes, all Americans (and any illegal aliens with jobs) do pay taxes to support the insatiable appetite of the beast which runs our government, even if many think they are getting off scot-free. Have a job? Then you’re paying FICA & Medicare Taxes (plus the employer match), as well as receiving a lower wage, since any money the employer pays in business taxes is not available to pay to you. Also through business taxes, consumers pay through higher prices, while owners/stockholders get a lower return on investment and slower growth than otherwise.
Many Americans look only at the Revenue side of the ledger when they think about taxes, but that’s a big mistake. It’s the amount that our government spends which is the tax. Every penny they spend must come from somewhere – and that somewhere is all Americans.
The Deficit means government borrowing, and that crowds out the Private, Productive sector of our Economy from the money available to be lent out. To the extent that the FED prints new Dollars to buy US Treasuries, then the Dollar is debased, meaning that the Cost of Living must rise. (Don’t be foolish enough to believe the numbers put out by the Bureau of Lying Statistics. Better to look at a private source like http://www.ShadowStats.com) As I like to say, there is no such thing as a Tax Cut without a Spending Cut.
Our country is being destroyed by our leaders as they spend our money like drunken sailors (no offense to the brave men and women of the Navy). We need to reign in federal spending now. Not in 10 years. Not in 5 years. Now, as in today!
Now I realize that the idiots in charge today will not do it, so of necessity, we’ll have to wait for new leaders. But, which ones to support? What might they say to win my vote?
I want them to pledge to fight for 3 Constitutional Amendments:
- A Balanced Budget Amendment (including Off Balance Sheet Items – ie. GAAP accounting)
- A Pay Off the National Debt Amendment
- A Dollar Limit on Federal Spending
This last might need a little explanation. I see zero reason to allow our government to get a raise just because you and I produce more. Our Economy is made up of two Sectors: The Private, Productive Sector, and the Government Sector. If we allow the pols to spend more of what all Americans have created in the Private, Productive Sector, then all Americans will have less, plus Government Spending does not help the Private, Productive Sector to grow more for all Americans for next year – quite the opposite.
And, if we limit Spending to an actual Dollar number, then our rulers will have an incentive to prevent Inflation so that their Spending doesn’t lose purchasing power.
Now, there’s more I’d like from a candidate, but for now, this will tell me if any particular candidate has his (her? Hillary? Don’t make me laugh.) head screwed on right.
Call me a Fiscal Conservative if you like. But, I’m just trying to make sure I still have a country left to live out the rest of my years.