We’re already there, at least in the fiscal sense.
From Inferno, Dante Alighieri
Checking the national debt in real time as I commence this article, the word “hopeless” seems like an understatement. There is just no way that the United States of America as we know it can possibly survive. The current US national debt, the amount that the United States government owes, is well over $16,000,000,000,000. Perhaps a number with twelve zeros behind it is a little more scary than the word “trillion.”
Now, the federal government isn’t really liable for it. YOU, the American citizens are. (If you don’t live in the United States, stop now and say a prayer to thank God for that fact.) As of this writing, each US citizen owes well over $51,000; that is, every man, woman, and child, anyone regardless of age. If you give birth today, you will be handing your new-born a bill for over $51,000 that the poor soul owes. (No wonder those big spenders love abortion so much. Many adults have killed themselves over smaller debts than that.)
For the actual taxpayer, the picture is even darker. If you divide the current US federal debt by the number of individuals who are currently paying any amount of federal taxes at all, the amount is nearly $142,000 per taxpayer. Do the math for yourself and see how long it would take someone working at the minimum wage to pay his “fair share” of the national debt!
As if all that were not enough, the aforementioned $16 trillion federal debt figure is deeply understated because it does not include the unfunded Medicare, Medicare Prescription Drug Program, Social Security, military and civil servant pensions that the federal government has promised to provide. The total is beyond anything we can imagine without some innovative graphical visualizations.
But Isn’t It Fixable?
The answer to that question–if there is one–it will be neither simple nor pleasant. The government takes in much less in revenue than it spends. To do so by conventional means, the US government would have to do three things:
- Raise revenue greatly WITHOUT raising tax rates;
- Make massive spending cuts;
- Renounce a substantial portion of its current obligations.
We will look at them one at a time.
Raise Revenue Greatly WITHOUT Raising Tax Rates
One thing that history has shown is that raising tax rates past a certain point–and we are long past that point–actually decreases the total amount of revenue collected. Trying to raise taxes on the so-call “rich” is the least productive. Rich people always find ways not to pay. “Rich” people are the least likely to keep their money where the federal government can find it.
More to the point, there are not enough “rich” people to do much good. Even if you could take every single penny from people whose income is over $1,000,000 a year, it wouldn’t make much of a dent in the problem. In the long run, ALL tax increase hurt the poor and middle class the most.
Sell federal land!
Land is the one thing that federal government has plenty of. If you live east of the Mississippi, this may not be so obvious. However, the vast majority of land west of the Mississippi is owned by the federal government. Much of this land is highly unproductive due to government regulations, which have no legitimate purpose other than to impede commerce.
Collect users’ fees
I can just hear people grumbling about toll roads. There is always a certain amount of jealously and local pride. “Why do we pay a toll while other people don’t?” or “How come we have nice road without paying a toll?” The funny thing is that where we have toll roads in the US, there always seems to be some other route that drivers can take for free, yet the toll roads seem to have plenty of users. Even after the road is built, the tolls pay for maintaining it and keeping it open and available at all times. However, I cannot recall ever hearing anybody ask for a tax increase to make his local highway toll free.
There are so many other federal government “services” that could be pay-as-you-go. Air and sea navigation come to mind immediately. “Dock in the harbor, pay here.” “Land in this airport, pay here.” Of course, this is open to foreign revenue, too. Tell foreign leaders, “Want the US to help protect your country, pay here.” Some will prefer to go it alone, in which case we’ll save money. We simply cannot afford to have a finger in every pie all over the world. The list goes on and on.
Sell advertisements; everyone else does!
Some years ago, one Congressmen proposed selling ads on postage stamps. Why not? And where else? Gee, what would it be worth to have an ad on your passport? “Visit Paris” or “Rick’s American Cafe in Casablanca” could be inside every US passport. Even government buildings could don billboards. Say whatever you like, but that makes a heck of a lot more sense, and would bring in more revenue, than taxing the so-called “rich.”
Massive Spending Cuts
Our deficit is clearly not a revenue problem; it is a spending problem. Why is that one family of four can do all right on $40,000 per year, and the next one cannot get by on $250,000 per year? Pretty simple; it is all a matter of how each family spends it. Uncle Sam is spending far too much. Unfortunately, when we talk about spending cuts, most people focus on tiny little areas of misspending, which a fix won’t help much, or cuts in defense, which is something that must exist in some form. However, there are areas ripe for massive cuts that would help significantly.
The biggest item is spending is actually unconstitutional in its current form, but unthinkable to eliminate. It cannot be eliminated entirely, but it could be made constitutional. Sell Social Security to an insurance company . . . well, actually, to several insurance companies, not as the large behemoth that exists today, if ten (or more) different insurance companies bought the right to collect the payroll taxes and, with it, the obligation of paying the current benefits, it would be win-win. Insurance companies pay far more for similar products. All that social security really is, is a very small life insurance policy ($250 total payment), an annuity with no minimum payout, and a minor disability policy. Want to have some fun? Go back two years or so, before the so-called “payroll tax holiday,” and see what was taken out of your check for F.I.C.A. Then call your favorite insurance agency and ask how much insurance you could buy, life, annuity and disability.
Defense spending is not only Constitutional, but necessary. However, it does not need to be this high. There is no reason to have troops based all over the world, unless the host country is willing to pay for the US to defend them. If a US company has an important interest in a foreign land, then that company can either A) create its own security force or B) pay for the cost of US troops.
Medicare and Medicaid amount to another big expense. Combined, they are actually higher than defense spending. Again, we are looking at something that is unconstitutional, but hard to eliminate. These programs could also be sold to private companies or transferred to the responsibility of each individual’s state of residency. So far, all attempts to make them more efficient have failed. Both were bad policies enacted to buy votes with taxpayer dollars. Now, the bills have come due.
Far too many people work for the federal government. In 1980, Ronald Reagan initiated a federal hiring freeze. That would be a good start, but it would no longer be enough. Some people just need to seek employment in the private sector. We need to end the war on drugs immediately. All federal employees who are chasing narcotics must either get a transfer to something more useful, or receive their pink skips. We need to release everyone who is in federal prison for non-violent drug charges immediately. That would allows us to lay off prison personal and close existing prisons for even more savings.
In general, if the federal government doesn’t need to do it, it shouldn’t do it. Let the States or the private sector do it, or eliminate the function entirely.
Renounce Current Obligations
One of the biggest areas of spending is federal pensions. Let’s start with the people who made the mess. No former Senator, Representative, President, Vice-President or top-level Cabinet official should ever receive another dime in federal pension until the national debt is paid off, the federal budget is in balance, and a substantial surplus has been squirreled away for a rainy day. Then, and only then, any of those aforementioned retirees who are actually in dire need should receive a small pension.
All other federal pensions should be means-tested. No one should get rich because they used to work for the feds.
End the Fed
While we cannot endorse everything Ron Paul advocated, we certainly agree that Federal Reserve Banking system is not a good thing. It has been estimated that the it holds roughly forty (40%) percent of the national debt. Close it and renounce the debt.
The Chinese have been selling bootlegged products on the US market, violating our copyright and patent laws, not to mention US safety regulations – and at the same time, loaning the US government money. The US could renounce its debt to China unless they agree to play fair. Or better yet, just renounce it and tell them that if they start playing fair, we will pay future debt. (They have to loan their money to someone. Don’t think that renouncing US debt would keep them from loaning money again in four years when (or if?) a new president takes office.)
These measures may sound rough. Well, they are! The United States is beyond hopeless. A Romney victory would not have done it. A deal that avoids the so-called “fiscal cliff” won’t do it. Only a one-hundred-and-eighty-degree about-face will do it.
Last October (2011), when y’all were so sure that Obama would lose reelection no matter what, I told you that a Romney nomination would reelect Obama. I am not infallible, but I am just as sure that anything short of drastic immediate action will end the United States as we know it.