Saturday, December 29, 2012

It's All About Spending - Stupid

If the Bush Tax cuts are allowed to expire, on paper, it will bring in $4 Trillion in new federal income tax revenues, mostly from lower income people and the middle class, in the next ten years.  Of course, it is likely to be less because this huge tax increase on everyone will retard economic growth and be a job killer.   But, we can play the game for argument sake.  Socialist President Obama has borrowed and spent more than a Trillion dollars, every year of his Presidency, with no end in sight, adding $6 Trillion to our $16 Trillion National Debt.

If the Obama trajectory is allowed to continue, assuming the markets will allow it, which is not the case, as much as another $20 Trillion could be added to the National Debt in the next ten years.   Using fifth grade math, all that is needed, if we subtract $4 Trillion from $20 Trillion, that means we would end up with a total National Debt of about $32 Trillion.   But since, the Bush Tax Cuts are likely to be made permanant for 98% of Americans as part of a Fiscal Cliff deal, we will not see this $4 Trillion in new revenues.  Instead, it is likely to be only $1 Trillion, the tax on the "rich", which would put our National Debt at about $35 Trillion ten years from now. 

By current measurement, that number would represent more than 200% of Gross Domestic Product.  Only Japan has numbers that are worse today and their economy continues to suffer for it.   Bankrupt Greece, Spain and Italy are at 125 - 150% of GDP.   But not to worry, the markets will never allow us to get to a $35 Trillion National Debt.   Instead, we will see the economic collapse of the United States long before.   When that happens the dollar will be worthless.   We will have civil strife on our streets.  And, we will lose our national sovereignty as those we owe money to, particularly the Chinese, will make demands on our people and our country that we will not be able to control.

It's all about spending - STUPID.   If all the wealth in the country were confiscated, we could not fund Obama's current spending trajectory, along with the $100 Trillion plus of promised, unfunded liability for Social Security, Medicare, Medicaid, government pensions and ObamaCare.    Certainly, just raising income taxes on the "rich", defined by Obama as families and businesses with $250,000 a year of income just a "little more" will only bring in, about $80 Billion a year,  enough revenues to fund the government for 8 days a year in each of the next ten years.   It is all BS, feel good Class Warfare; not serious economics.

In the last two years, for the first time, more money is going out for Social Security benefits than is coming in through payroll contributions because Baby Boomers are starting to retire.   There is no Social Security Trust Fund, just IOU's from the federal government because politicians of both political parties have been stealing our contributions to pay for guns and butter since 1965.   So now the government must either print, or borrow money, both of which are happening, to pay Americans their Social Security benefits. 

The United States is headed toward certain bankruptcy if we don't reform Entitlements, Social Security, Medicare, ObamaCare, Medicaid, Welfare and Disability Benefits NOW.   We also must cut spending by eliminating 500,000 federal civilian employees, out of the current 2.65 million, through normal attrition, to bring federal government spending down from Obama's current 25% of GDP to the more traditional 18% of GDP.   This means eliminating redundant programs, commissions, agencies, departments etc, the same as would happen in business when spending is too high.  

Of course, Socialist President Obama and his pals in Congress will never do any of this because it means ending the gravy train for their PEEP's, those on the dole, the 50% of Americans that pay no income taxes at all, public employee union members, illegal aliens, radical feminists and environmentalists, trial lawyers and crony Capitalists.  Unless and until these characters are thrown out of office and we have responsible grown up's running our government, we are destined to suffer economic collapse.  It is what it is.  Buy Guns, Gold and Real Estate because economic chaos is coming unless we get federal government spending under control.   Don't count on it.   

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