The current economic course that our nation is charting is unsustainable. The American taxpayer now holds a stake in about 80% of outstanding mortgages. Entitlement programs (Social Security, Medicare, Medicaid) will take more than 100% of tax revenue this year. That means that those programs are outgrowing our economy. Instead of talking about reducing debt, the government is just piling it on: government run student loans, health care, catastrophic insurance for everyone, and talks about a bailout for the U.S. Post Office. Talk of reducing deficits is clearly campaign fodder. It’s not taken seriously in Washington. Politicians have campaigned against deficits for decades upon decades. If I keep telling you that staying in shape is a priority, while continuing to eat fatty foods and not take care of myself, pretty soon you must conclude that I’m full of beans and staying healthy is not a priority. So, Washington, you are full of beans, reducing the deficit is not a priority for you.
So what now? What is the result of all of this? The result is that the government is now taking more freedom from the people. If you are reading this and live in the United States, you are on the hook for thousands upon thousands of dollars. Your unborn kid is too. That’s not freedom. You are on the hook because government cannot control its compulsion to spend money that they never earn. Government is now like a gambling addict with 30 grand in credit card debt, a job that pays 12 bucks an hour, who still continues to buy things. Our system is heading for complete collapse if we don’t put a stop to the spending now.
How can the government get more money? Higher taxation, more tax revenue, or less spending. Taxation has serious downsides. Taxing more hurts the economy and stunts growth and production. People won’t have money to spend, save, hire, or create. Others will stop spending or stop making just to stop paying. This is part of human nature that government never seems to understand. See, it’s human nature to spend money that’s not yours. Especially if it gains you something, like reelection. But it’s also human nature to look out for your own best interest and make sure you have enough money to survive. Government gets one and doesn’t get the other because they live in a bubble.
If government reduces taxes now, it will spur the economy. People will have money in their pockets. Companies will have more money to invest in employment or products. The problem, at this point, is we are beyond the final exit. Even reduced taxation and a churning economy will not save our economic future. The government needs to stop spending. Picture your gambling addict friend from above. He gets lucky and gets a new job that pays him 15 bucks an hour and even hits a few good bets in Vegas. But he still spends and has credit debt. Will his new found income make the difference? Maybe in the short run. In the long run he’s still going to go broke unless he stops spending and pays off his debt. If not, he will forever be a slave to Visa and Mastercard. A voluntary slave. Same with the U.S. citizen. Only most of us are not voluntary. But make no mistake, you are living out a form of financial slavery because the government can’t stop spending.
The hardest hit are the middle class. They are on the verge of making it, but getting hit with tax after tax and rising price after rising price. It may be easier just to get government assistance. It used to be the American Way to pull yourself up and create a great future for yourself. That is becoming harder and harder because of government. Kind of the opposite of what it started out as in Philadelphia.