Math was never my strong suit. Some would argue neither is speaking clearly or walking upright for prolonged periods of time. But the grasp of math I do possess causes me great concern when I think about the crushing debt of the United States.
First, I'll talk about what I know.
As I write this, the two party's are trying to hash out an agreement that will either cut federal spending by $30 billion dollars or $60 billion dollars for the remainder of the current fiscal year and keep a government shutdown from happening. The feds spend about $36 billion a day. The current federal budget is $3.7 TRILLION. The cuts that are being discussed in Washington are like a cup of water out of the ocean. Or approximately a 2 ounce weight loss from Rosie O'Donnell. And yet to hear the Democrats talk you'd think that the republic is going to end because we may not fund a cowboy poetry festival in Senator Reids home state of Nevada.
At the beginning of the fiscal year 2000 we had a national debt of $5.6 trillion. As of March 31, 2011 it stands at $14.2 trillion. Now I may not be real good at math, but I can see where this is going. Since the dawn of Roosevelt's New Deal we have set this nation on a path of inevitable debt. Social Security for example, was never intended to fund a persons retirement. It was meant to be a safety net to supplement a retirement nest egg that you were suppose to provide yourself. While the benefits became more generous, the amount of people contributing to a single retiree dwindled. At the beginning of the program, the average life expectancy of a man was 65. It was thought that the average person might collect benefits for 3 to 4 years. My father has been collecting for 24 years. My Mother, for 22. And they're not untypical. In the beginning there were 18 workers for every retiree receiving benefits. That number is now 2.3 workers. As babyboomers advance into retirement age, the number of workers to retirees ration will narrow even more. We will then have a nightmare - the largest amount of Social Security recipients financed by the smallest percentage of workers in the history of the program. Social Security may have been well intentioned. But it was a well intentioned pyramid scheme. And yet Social Security is not our biggest problem.
Medicare requires even more attention. In 1966 it was estimated that Medicare would cost $5 billion by 1990. When 1990 rolled around the real price tag was $95 billion. Ooops! Clearly, this was before the age of calculators. Government always over promises and usually at a far lower price than initially quoted. They just can't help themselves. In that respect, they're like home contractors. Supplying seniors with a voucher type system that would allow them to choose a policy of their own, would drastically reduce cost to the program. Especially when you consider that another 100 million people in the national medical pool would create competition among health insurance companies for those dollars. Allowing medical insurance companies to sell policies across state lines would create significant competition. I can buy my house , life and car insurance from a company in Kansas, but not my health insurance. In what universe does that make sense? But those options were not even considered when ObamaCare was shoved up us like a colonoscopy.
So what are the answers to our problems? Well, we could tax the rich more. But consider that the top 1% earn 19% of income but pay 37% of taxes. And the top 10% pay 68% of taxes. The bottom 50% pay 3%. So much for shared sacrifice. Besides do you really want to raise taxes on the job producers? That never worked before. Go ask Jimmy Carter. So maybe raising taxes isn't a real solution to our problems.
If the average Joe finds himself in a financial bind, he usually cuts back on spending. Especially things he can't afford and may not really need. (Like a cowboy poetry festival) The last thing he'll do is go on a spending spree. Yet that's exactly what we did with that charming little stimulus package. $800 billion. $1.3 trillion when you add interest. And yes, we have to pay interest. Suddenly the $60 billion in cuts the GOP is asking for doesn't seem so big, does it. The stimulus package was meant to keep unemployment under 8%. The current rate is higher than that even now two years after it passed. When you factor in the true unemployment rate - people whos benefits have expired and are no long registered as unemployed and those who have given up looking for work, the rate is well into double digits.
What I don't know.
I don't know when we're going to have politicians with enough backbone to tell us what we don't want to hear. There are some voices of reason out there. But they are drowned out by those who employ class warfare and claim reformers want to to starve Grandma so fat cats can buy new Mercedes. It's popular in some circles to say "Raise taxes on those who have too much money"! Well, how much is too much? And who gets to decide? People of all economic strata earn their money. The government isn't entitled (there's that word again) to one dime. So they confiscate some with a tax code and redistribute it as they see fit - usually to curry favor with one group or another. Another reason why a flat tax makes the most sense and will be almost impossible to implement. Besides if incomes over $250,000 were taxed at a cartoonish 80% rate, it's impact on the debt would be negligible. That's right. Negligible. I understand we need revenue and taxes are necessary. But more necessary is fiscal restraint. You see, we don't have a tax revenue problem. We have a spending problem. And until the powers in control of doling out cash to their favored constituents are really ready to address that issue - the $14.2 trillion debt we have now will seem like chump change 10 years from now when it's approaches $40 trillion.
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