Politicians on both sides of the aisle, but in recent times mostly Democrats, love to use fear to drive home whatever point they are trying to make. Yesterday, at the State of the Union Address given by President Biden, he actually tried to frighten people by saying “Republicans were trying to sunset Social Security and Medicare.” It was a bold-faced lie intended to frighten seniors dependent on social security to live. He also tried to blame the prior administration for the rise in National Debt which today stands at $31.5 Trillion, ignoring the fact that his administration in two short years contributed $5.0 Trillion to that number.
It has become tougher and tougher each day to sift through all the rhetoric to determine fact from fiction or, to be blunt, lies from truths. But numbers do not lie. And so, I have prepared a simplistic analysis that identifies and encapsulates the true existential threat to this planet….and it is not climate change! It is not Russia or China or Iran either.
The real existential threat to America and the world is our National Debt which is predicated on the full faith and credit of our nation. Consider the following:
THE NATIONAL DEBT AND WHY IT IS THE MAJOR PROBLEM WE FACE TODAY AS A NATION
PRESENT SITUATION: ( $TRILLIONS OF DOLLARS 2022)
|U.S. NET TAX REVENUE-ALL SOURCES||$4,570,000,000,000|
|FEDERAL BUDGET SPENDING||$5,720,000,000,000|
|NATIONAL DEBT BEGINNING OF YEAR||$30,100,000,000,000|
|DEFICIT FINANCING-“NEW BORROWING”||$1,150,000,000,000|
|NEW NATIONAL DEBT|
*A little higher as we stand today and likely to approach $32.0 trillion by the end of 2023 based on current trends. Now, let’s drop some zeroes and portray these numbers in terms of what it means to a family in America to understand what has been happening*
Assuming 100 Million Families in America
|TYPICAL ANNUAL FAMILY INCOME||$ 45,700|
|MONEY THE FAMILY SPENT||$ 57,200|
|NEW DEBT ON CREDIT CARD||$ 11,500|
|CREDIT CARD DEBT-BEGINNING OF YEAR||$ 30,100|
|ADD NEW DEBT ON CARD||$ 1,150|
|NEW CREDIT CARD DEBT||$ 31,250|
Note: If you listen to all the rhetoric and jawboning of politicians, the problem is rather clear. We do not have a tax revenue problem in this nation, we have a spending problem. Stripping away all of the zeroes from the above illustration, we see that this “family” realized income of $45,700 but spent $57,200. They spent more than they took in. This problem has persisted for decades here in the United States. Yes, additional spending of some $7 trillion since 2020 was spent to deal with Covid but how much of that spending was absolutely necessary and what was the impact on our nation’s economy. We know now that shutting down our economy was not an appropriate action and only exacerbated the problem of production, manufacturing and delivery of products to market.
Do you begin to see the problem now? Now, think about these questions:
How long do you think this hypothetical “family” will continue to be able to borrow money to cover their cash drain brought about by their extensive spending in excess of what they earn? Soon, their “lending sources” will dry up. So will their credit rating and “FICA score”. What happens if our nation faces this? Can it happen? You bet it can. It is called a default and if it happens the repercussions will be devastating not just here, but around the world.
How long do you think “entitlement programs” like food stamps and unemployment will be able to continue? How long do you think the government will be able to fund benefits for housing subsidies and care for those in need?
How much is the drain on our economy and taxpayers of the 6.o million illegal immigrants (thusfar) pouring into our country, each receiving “free” housing, healthcare, spending money and cell phones, all borne entirely by the U.S. Taxpayer? What about the impact to our nation of massive amounts of drugs including fentanyl which has killed over 100,000 Americans? What about the economic impact of immigrant children now enrolled in our classrooms who do not speak a word of English?
What happens to our cities if we defund the police? Will crime increase? What do you think is happening in our cities across America today?
How long do you think we will be able to maintain our defenses in a period of time when China, Iran and North Korea routinely challenge the sovereignty of our nation and our allies? We are providing Ukraine hundreds of millions in the form of armaments, presuming from our weapons stockpiles, so they can continue their fight against Putin’s invasion. How will we replace those weapons for our arsenals and what will that cost? Who will pay for it? You guessed it…you and I, the American taxpayer.
How long do you think that half the people on food stamps and unemployment can continue to be subsidized by government from the work of half the people who are working and being taxed understanding that roughly 50% of Americans pay no income taxes whatsoever?
Is “climate change” really the existential threat to our world as elites in our government and other parts of the world make it out to be? We are planning to spend hundreds of billions of dollars on this issue over the next couple of years without ever having a single debate to explore viable alternatives Have any of you read or heard about an objective debate of scientists, pro and con, discussing this issue? I have not. Do any of you know how much lithium, cobalt and zinc are needed to produce one battery for a car? Where will we get these resources? The short answer is mining…but where are those mines? They are located in areas of the world who are not at all friendly to us. So how will we get these resources and at what cost? And what about the environmental and social impacts of extracting these minerals along with the land needed to dispose of batteries/wind turbines/etc. once their useful lives have been reached? Are there no alternative approaches to developing clean energy, such as nuclear power, that can be pursued? Shouldn’t more efforts be devoted to first examining all of these issues? And what, pray tell, is wrong about accessing coal and oil to fuel our homes and cars and economy while we search for alternatives?
Our nation is sitting on vast amounts of oil sufficient to provide for our needs for the next 500 years. These deposits are in the Bakken Fields in North Dakota, Alaska and offshore…but regulations enacted by our current administration prevent us from extracting these resources, so Americans are left paying more tor energy which is unnecessary and financially unsound. Why?
Where will funds come from to invest in new technology intended to improve efficiency and production? America grew as a nation because we had an economic system, capitalism, which rewarded risk taking and innovation and discovery. It is the very reason why our nation has earned more Nobel Prizes in Science, Medicine, Technology and the Arts than any other nation on earth. But what has happened to our educational system today? We no longer lead the world having been outpaced by China, Japan, Finland, Denmark, India and other nations. China has 369,572 Chinese students enrolled in college and university programs here in the United States mostly pursuing degrees in STEM. Do you know how many American students are studying in China? 11,639. Do you really believe that every single one of these Chinese students are here for the pursuit of academic knowledge?
How will we be able to get people back to work in productive jobs when industry lacks the basic confidence to make commitments because of all the stifling regulations and risks we face as a nation? Equally, government programs that offer remuneration (compensation) for not working is a disincentive to working which in turn results in a decline in productivity.
For those who believe that healthcare is a right and not a privilege, where will we get the money to pay for healthcare for all as a free right?
For those who believe getting a college education should be free, where do we get the money to pay for this? President Biden has called for the “forgiveness” of significant amounts of student loan debt. Under the Constitution he has no authority to do this. More importantly, he is not “forgiving any debt”; he is merely transferring it from individual obligations to the National Debt…you and I…who are expected to pay back these loans. The problem is the majority of Americans did not take out these loans so why should they be obligated to pay them back?
Do we really need to hire 87,000 more IRS agents at a cost of over $100 billion with inflation spiraling out of control and citizens struggling to make ends meet as the dollars they earn diminish in value?
Oh, and by the way, our annual interest cost on our spiraling out of control National Debt is rapidly approaching $1.0 trillion…with no real plan for paying this massive obligation owed to “We the People” back!
You see, ladies and gentlemen, this problem is the central major issue facing our nation today and it is our responsibility to help fix it……and to demand that those we elect and send to Washington to act on our behalf do so because they are accountable to us! In our country we have a government which exists to serve the people, not the other way around. It is important you remember this. Now, this is a historical fact: Government can do absolutely nothing better than the private sector can. Yet the government seeks to intrude into our lives with more and more regulations providing obstacles to growth. Our National Debt is at a level that it portends a stranglehold on our ability to defend ourselves and to “ensure the blessings of liberty to ourselves and our posterity” so eloquently stated in our Declaration of Independence. More importantly, if our credit worthiness or lack thereof continues on this downward spiral, we will find ourselves in the midst of a collapsing financial system with reverberations around the globe.
Yes, we can certainly improve our tax system. There is always room for improvement. But it is important to remember that our tax system has worked well for us over the past 110 years.
What has NOT worked anywhere on earth… ever… is socialism, and as government expands, that is what you get.