America At A Financial Crossroads

I am very troubled by a government that continues spending money it doesn’t have. The total federal debt next year is expected to be more than $14 trillion. That is about $47,000 for every resident of the United States including your children and grandchildren.

In spite of what the administration and the leaders in congress have been preaching that they’ve “pulled us from the brink” and our economy is gaining strength. The mainstream media eagerly sings the chorus that the recovery is under way. It is not. The economic growth that we’ve seen this year is phony.

The Gross Domestic Product (GDP) has been rising, but not because the economy is getting stronger. The only reason the GDP is rising is because we are going deeper in debt to spend money. What is happening is that our nation’s debt is growing much faster than our GDP. Money being borrowed from foreign sources is being spent on more government and more consumption. By following the path we are on is sowing the seeds of our own economic destruction.

It appears that every day we are hearing that the political establishment has passed new laws that increase the scope of government and add to an already massive national debt. The government simply cannot continue to grow in size when we are spending close to $4 trillion a year to run it. It is unsustainable and if we, as a nation, do not act soon to change the spending culture in Washington, we will be inviting an economic collapse far more spectacular than what we’ve already seen. To continue down this road of spending money that we don’t have will surely bring disaster. The bond market will collapse. The value of the dollar will plunge. Interest rates will rise. There will be runaway inflation and even higher unemployment.

What is the leadership in Washington doing to solve this economic crisis? Absolutely nothing! When American families find themselves in hard times, they have to make adjustments in how they spend what they have—Congress should be expected to do at least as much. The progressive majority in Congress has had years to address this impending economic disaster but have refused to act. In June, the House leadership announced that for the first time in the history of the budgeting process, they would not set a budget this year.

Not only are they refusing to set any limits on their own spending, but now they are even talking about putting off the issue of the Bush tax cuts into December so that they can raise our taxes without having to answer to the American voter. In January, if you earn income, your taxes are about to go up. If Congress does not act to preserve current law, even the lowest 10 percent bracket will rise to 15 percent.

The progressive majority in Congress is refusing to extend current law because they believe that these tax cuts are the cause of our trillion dollar deficits. They are wrong. The real cause of our nation’s debt problem is spending and it’s been done by both Democrats and Republicans.

Simply bringing real federal spending back to the inflation adjusted $21,000 per household average that prevailed in the 1980s and 1990s would balance the budget by 2012 without raising a single tax on anyone. Even returning spending to the pre-recession level of 20 percent of GDP would eliminate two-thirds of the projected 2019 budget deficit without raising taxes.

Let there be no doubt. America is at a crossroads and the choices we make at this point in time will determine what kind of country we want to be.

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