So now our national debt exceeds our economic output. I will have to add this to my list of numbers that reflect how dire our situation really is, and how there's no easy way out. Here's the list:
- Over $14 trillion in debt, which exceeds our gross domestic product.
- Over $61 trillion in unfunded liabilities to Social Security and Medicare, which is more than four times the debt.
- A 100% tax on all people making more than $250K a year would not even cover the deficit for ONE YEAR, and government would no longer have rich people to demonize for its excessive spending because it would have taken all their money away, as well as their incentive for making more.
- Social Security, Medicare and Medicaid make up just over 61 percent of the U.S. federal budget. We could eliminate all other federal spending, and still be in a deficit because the costs of these three programs alone exceed our annual revenues.
Everyone needs to wake up and realize the trouble we are in. There is no easy fix for this, and "taxing the rich," "closing the loopholes," usually for businesses - I don't see anyone volunteering individual deductions - and "cutting defense," the three most popular chants I hear from many, have practically no impact on an enormous debt.
Moreover, other than closing loopholes and eliminating corporate subsidies, steps in which I believe as an advocate of a truly free market, the problems they create quickly overwhelm whatever benefit they may bring.
Taxing the rich has a crippling effect on economic growth, and the rich will either find shelters, take their business elsewhere, or pass the costs on to the consumers of the product or service which made them rich.
Cutting defense willy-nilly, without defining what constitutes an effective national security strategy and building around it, puts our nation at risk.
The crime of this administration, despite its attempts to deflect blame to the previous one - and they own their share of it - is that it continues to spend at levels never approached by previous administrations. Ever.
The people might be more forgiving if President Obama, while blaming President Bush, was calling for spending cuts, or even a moratorium on spending. Will Rogers said, "When you find yourself in a hole, the first thing to do is to quit digging." You can't spend your way out of a deficit, but this administration is not only continuing to dig, it's using a backhoe rather than a shovel.
Here's the elephant in the room. The reason neither Democrats and Republicans don't want to tackle this problem is because the steps necessary to do so are going to take decades. Decades.
Whole programs upon which millions of Americans have come to depend would have to be terminated.
Like a struggling businesses on the verge of bankruptcy, the U.S. government would have to determine what its core competencies are, and divest itself of anything that doesn't fit. The U.S. government's core competencies were defined 224 years ago, but it has well exceeded those boundaries for generations now and, like a company about to crash, the shareholders are demanding that it cut loose anything that doesn't fit into its core mission.
The question is, are we ready for when they finally do that? It won't happen before we crash - that's a guarantee.
The statists will be arrogant to the end, believing that it's not spending, but spending on the wrong things, that's the problem. They will continue to press for "investments" in things that they believe in, thinking themselves smarter than all the socialists who preceded them. It matters not that socialism has failed, and continues to fail, at levels ranging from a colony at Plymouth Rock, or a private charity in Nicaragua, to the governments of world superpowers.
It matters not that the Pilgrims’ attempt to use common property to feed and care for one another failed miserably, and that only when they divided property into private plots were the industrious motivated to produce, and the lazy forced to work if they were to eat. The switch from communal farming to privatized farming led to the colony’s most abundant harvest, and their largest Thanksgiving celebration in 1623.
It matters not that Amigos for Christ, a charity operating in Nicaragua, collapsed after following a communal model, reconstituted itself using private property and incentives, and is now thriving, with 120 people starting their own businesses and creating jobs for others.
It matters not that the leading socialist superpower, the Soviet Union, is no more, and that the blood of over 120 million people worldwide was spilled for the deceit of communism, or that Europe, the beacon of democratic socialism, is on the brink of economic and social disaster, and nations are speaking openly of balanced budget amendments, reductions in the size and scope of the welfare state, privatization, and loosening of regulations to turn things around.
No, the eternal arrogance of the socialist is, "Everyone else did it the wrong way; I can do better. I am smarter and more compassionate than those who preceded me. I will learn from their mistakes, and I will care more."
They don’t, or won’t, acknowledge that the mistakes from which they seek to learn are unavoidable. Socialism itself is in immutable conflict with human nature. Inequality of income is an inevitable consequence of human beings having different talents, abilities, aptitudes, and drives. Some will maximize their potential, others will not. Some are driven, others are not. The only equality they deserve is the equality of opportunity, getting the same shot at success as anyone else.
Yet equality of opportunity isn’t enough for the socialist. They want equality of outcome, and the only way to achieve that is by first discrediting the existence of equality of opportunity, then disincentivizing those with the abilities and will to succeed, and incentivizing indolence in those who lack those traits, through legal plunder, Frederic Bastiat’s excellent term for taxation and redistribution of wealth.
None of this matters to the socialist. So they cannot and will not prevent a crash.
The politicians who claim to carry the banner for conservatism will not prevent a crash, either. Their problem can be summed up in one word – fear. They fear being pilloried by a hostile press. They fear damaging their chances for reelection. They fear the loss of power and influence in Washington and among their elitist peers. They fear the people who are not ready to remove their mouths from the government teat.
Their fear prevents them from halting the oncoming crash.
So are you ready? Are your personal finances in good shape? Do you have enough reserves to live on? Are you thrifty? Are you a prolific coupon shopper? Can you grow food? Can you protect yourself and your family? Do you have a strong moral and spiritual constitution that can withstand hard times?
These are important questions to ask yourself, because it is the prepared and self-sufficient who are best positioned for the new world in which we are about to enter. Don’t forget to reach out and catch your fellow man as he falls; it’s what God commands us as individuals to do.
Be prepared. The hole being dug for us is going to come out on the other side of the world, and you don’t want yourself or your family to fall through it.