“Spending vs. GDP. [Here are some] CBO projections: by 2022, [Federal] spending will be 23% of GDP; by 2050 = 55%; by 2070 = 90%. Totally unsustainable. Revenues have only increased 20% historically.”
“Debt vs. GDP. Now the ratio is 67%. [By that is meant for every dollar the Federal Government spends, $.67 cents is borrowed.] By 2050 it will be 100%. The recently recommended debt goal is 40-60%. So if we don’t reduce debt, we will be bankrupt, no question about it. Social Security and Medicare will turn into “pay-as-you-go” programs [because we can’t afford to borrow to pay for them]. Bottom Line: more pain now, and more pain later.”
“Two recent Task Forces produced recommendations. Let’s see how many we agree with: 1. They both recognize the problem as real, and opine that Washington must act now; 2. It’s cruel to make promises that can’t be kept, [like Social Security]; 3. We must still protect the disadvantaged; 4. We must reform and simplify the Tax Code, [which has over 5,000 provisions]; 5. We must have Social Security reform; 6. We must reduce healthcare costs – it’s our biggest spending problem; 7. We must reduce annual spending deficits to only 3% of GDP, [now they are 5%]; 8. We must adopt a progressive tax system; 9. We must institute a National Sales Tax (Internet etc.); 10. We must cut Corporation Taxes from 35% to 27%; 11. We must eliminate tax deductions and credits, saving $1.1 trillion; and we must eliminate the Alternative Minimum Tax (AMT); and 12.We must institute higher gas taxes to fund transportation infrastructure (on top of state sales taxes). Bottom line: [In all of this,]the Feds don’t care about the states problems [at all.]”
“Congress has also convened separate Debt Reduction Task Forces: 1. Healthcare, 2. Social Security – with no income limits on contributions, and reductions in benefits to millionaires, 3. Debt reduction – Freeze spending (in place now, including Defense), and enforce spending caps; become a pay-as-you-go system. Problem: Bush II abolished the spending caps. And 4. A Biennial Budget (every two years instead of one) – 26 states have it now, but the problem is revenue estimating that far ahead.”
In closing, Rich stated: ‘“A lot of these things better start happening now.” We must cut our national debt to 60% of GDP by 2024, and below 40% by 2037. Raising taxes alone will not solve our problems – we need cuts too. Bottom line: we need much better controls on spending.” I agree wholeheartedly, especially about the need for more and better controls.
Rich also showed many documents from www.cbo.gov to make his points.
That’s a lot to think about, and even more to do. But we can’t just stop everything and pay off the debt. Think of the thousands of decisions, big and small, that have to be made to solve this problem! Aren’t you glad you’re not a legislator or the President? So, tell me, what tax deductions can you personally live without? Your mortgage deduction? Or, would you also like to pay a higher gas tax? How about higher Social Security taxes? Guess what? We’re in store for these and much, much more in the days ahead. I can only say that I pray to God every day that I continue to receive my monthly state pension and social security checks. Think about the millions of people who have neither, or very little. Or those still looking for a job. How will we get them out of this mess?
Somehow, our representatives in Congress, must put aside their differences and work towards consensus. Wouldn’t it be novel if they voted their individual conscience and not by party lines? What about having more voices in government? How about establishing “The Independent Party” who can vote to end these deadlocks? All in favor?