Billions and trillions. Debt and deficit. Tax, borrow, and spend. Those words are getting close attention these days with the February 1 unveiling of President Obama's proposed budget.
Every American needs to take a moment to ponder our country's financial condition and consequences of failure to get our fiscal house in order.
The President is proposing to spend $3.8 trillion in the next fiscal year, which begins October 1. He is also asking for tax increases and limits on deductions (more tax increases). Even with $2 trillion in new revenue the President wants we would still be $1.3 trillion short and the administration will borrow much of that from the Chinese.
In this current fiscal year, we are running a record $1.6 trillion deficit. Moody's Investor Service has said that this deficit jeopardizes the triple-A bond rating held by the U.S. This current deficit is 10.6 percent of our Gross Domestic Product (GDP), the highest since World War II.
I serve on the Joint Economic Committee which issued a report on government debt, finding that peace-time debt can be more difficult than war-time debt. It said, "Peace time debts have no natural end and can indicate unstable underlying political economy dynamics which may endure for a long time."
Democrats in Congress recently raised America's debt ceiling, our line of credit if you will, by $1.9 trillion to a total of $14.29 trillion. By this time next year, Congress will have to raise it again to keep the cash flowing.
Interest on this debt is $202 billion this year and by 2019 projections show it will exceed $700 billion annually.
Every economist, liberal or conservative, republican or democrat, agree that this is unsustainable. We must eliminate deficit spending and balance our budget if we are to maintain our superiority in the world. It is among other threats, a national security issue.
On occasion someone will ask why I don't support a tax increase to reduce our deficit and debt. To me it comes down to two fundamental reasons - taking more money out of the pocket of people and businesses harms economic growth; and second, government has rarely shown the fiscal discipline to not spend more than it takes in.
So we must begin right now to reduce our government spending and determine our real priorities. We must thoroughly examine each agency's budget and ask, like the EPA, for example, why they are getting even more when last year they received a whopping 37 percent budget increase?
If we don't start now we will all owe our children and grandchildren an apology for the nearly unsolvable mess we will leave them.
