The Financial Dilemma America Faces That No One is Willing to Solve – Let’s Do Some Math

Here are some numbers to consider that are mind boggling. It is important that you are aware of these numbers:

  • Our government borrows roughly 40 cents of every dollar it spends (Politifact)
  • In 2012 the government will take in about $2.17 trillion in tax revenue and spend $3.82 trillion – the difference is roughly 43%. That 43%  is the deficit for that year. So put in smaller terms, of every dollar we spend, we have to borrow between 39-43 cents to spend it.
  • Last November I posted this article (Eye Popping numbers Regarding our National Debt) that lays out how much we owe (now $16 trillion, how fast it has grown (nearly doubled in 3 years) and how much interest we pay on that debt annually – nearly half a trillion dollars in interest ANNUALLY! Agh!

Any of you who have ever made a budget know there are two ways to cut your debt. You have to either make more money (raise taxes) or cut your spending. Let’s say we cut 50% of our spending (from 3.82 trillion that would get us down to $1.91 trillion in government spending)…if we maintained our current tax revenues ($2.17) that is a surplus of $200 billion. Remember, the interest in our debt alone is just under $500 billion per year because even though we would be starting to pay it back we are still trying to pay off $16 trillion at $200 billion/year while the interest is $500 billion. That is like the interest on your credit card being $500/year and you are only going to pay $200 per year on it. Is your debt going to go down? Nope. That means we either have to make further cuts (basically impossible beyond the 50% haircut outlined above) or else use the other tool at the disposal, raise taxes to cover the $300 billion in interest we would be short each year. So let’s say you raise taxes by $1 trillion annually. Crazy…but let’s throw it out there. After the $300 billion in interest annually is covered, we would have $700 billion left over to pay on the debt. Let’s do the math $16 trillion/$700 billion = 23 years to pay off our debt.

That result is only based on these assumptions mentioned above:

  • 50% spending cut of all federal spending (have you ever seen the government cut any spending? Never going to happen)
  • Increase taxes $1 trillion (close loopholes, raise rates, etc)
  • 23 years to pay it back = the year 2035

We have to dig out of this hole and if we don’t start digging we aren’t going to make it. Additionally, someone has to make these tough decisions and no one wants to do it because both sides of the aisle or more interested in re-election and maintaining their power and influence than they are actually solving problems. This is very disturbing and it is time we get people in office across the board who will get something done.

The solution is also poisonous
Finally, here is the scary kicker. For the government to meet the above assumptions about cuts and tax raises would almost certainly tip us back into recession. The government makes up a decent percentage of our economy because as the government spends business here and abroad are the recipients of that money for their services. I haven’t been able to track down that number (this site says 28% but I don’t think it is that high). Our economy is growing at 2-3% per year right now but without the government spending that number would go negative (equals recession). So if you don’t cut anything and keep going like we are, our debt goes crazy and even the interest will be crushing (not to mention paying back a dime) and if we try to solve it our economy will go in the tank as it is relying on all that government spending and stimulus to stay on a level footing and not dip back into recession or depression. So who wants to pull the trigger?

Have a read of this article from the Washington Post today that says when governments start raising taxes and cutting spending, the damage done is even worse than they thought – IMF: Austerity is much worse for the economy than we thought

Here is an excerpt that has to do with what has been stated above, “Recent efforts among wealthy countries to shrink their deficits — through tax hikes and spending cuts — have been causing far more economic damage than experts had assumed.”

Last – remember, there are more ways to raise revenues than increase tax rates (which Jerry mentioned in the comments that even that can be counterproductive). If you can give businesses room to grow they will produce more tax revenue but we have been regulating them more than ever and being unpredictable with what the governments next  big move will be (think health care, stimulus, fiscal cliff…etc).


Obama Defeats McCain

Hopefully tomorrow we will have a picture of McCain triumphantly holding up a newspaper with that as the headline…

As far as I can tell McCain had no campaign. When he debated you couldn’t understand half of his explanations. He didn’t pursue Obama on his weaknesses. He didn’t tell us clearly and concisely what his plan is and why it is better than Obama. He seemed out of touch with his 90% agreement with Bush and his statement about the fundamentals of the economy being strong. He didn’t explain how Obama misused and misquoted his policies to lead people to a false understanding of his plans. He didn’t separate himself from Bush very well. Saying maverick over and over again does not get the job done. He left the uninformed believing that a vote for him was a vote for a third Bush term.

Obama on the other hand campaigned brilliantly. While I don’t trust very much of what he has to say and I wholeheartedly disagree with him on his willingness to kill babies in the womb…he ran a marvelous campaign technically speaking. He has set the bar for a new age of running campaigns, mobilizing people, using technology, and giving people something to rally behind. He showed us that a society that is about image will vote image as well as issues. I hope the Republicans take a good look at how he ran this campaign to learn for the future how to be a winner rather than just having pseudo-conservative stances on important issues.

However this turns out, let’s pray that the man who wins seeks God out earnestly for guidance and does what is best for this country and not just for special interest groups.

Christianity and Politics

Obama, Biden, McCain, and Palin all attend Christian churches. We tend to turn a blind eye when politicians do things for political expediency but what standard do you hold politicians to when they are also Christians? Is it fair for them to misquote the other on purpose for political expediency? Is it fair for them to lie about their stances and deny that they said certain things when in fact they did? Should we turn a blind eye when they distort each other’s voting records to scare people from voting for them? Should we willingly accept advertisements that are totally false and end with “I am ________ and I approve this message”? I am having a hard time with all of this because if they are Christians then shame on them for using these tactics. Shame on them for approving messages that are full of lies, half-truths, and misquotes. Shame on them for not carrying out a peaceful candidacy. There is something sinister about our political system and it is not healthy for us as a nation and as individuals and families. It is time the Republicans call out McCain for his missteps and say “We cannot stand for you talking that way.” It is time for Democrats to call out Obama for his missteps and misdirections and say, “You are held to a higher standard than that.” We get so afraid that if we point out flaws in our candidate that someone may not vote for them…but the truth is the truth and we have to hold our people to higher standards than this.

I just filled out my mail-in ballot and it was really hard for me to vote for either one of those men. I almost did a write in vote for Jesus bar Joseph because I have a hard time putting my endorsement on anyone who has led as misleading a campaign as both sides have done this time around. I am disgusted at how things have turned out this year and I cannot say that I am happy with either side.

Anyone Ready for the Election to be Over?

More fun with polldaddy – What do you think…are you ready for this election to be over?

Republicans and Democrats Have the Same Message?

I think it is kind of humorous that when you see the campaign adds you might actually come away thinking they have the same message. The Democrats say the Republicans have done a terrible job and so you need to vote change and vote Obama. The Republican candidates say the Republicans have done a terrible job in need of reform that could only come from a maverick. They are the real party seeking to change Washington so vote McCain. I guess it is all an effort to get as much distance between themselves and Bush as possible.

Something about that just seems humorous and sad to me all at the same time.

Write Me in for President…I Will Answer the Phone

With all the ads going lately you would think answering a phone in the wee hours of the morning is the number one criteria for being president. Well I have to tell you, I have a real problem not answering my phone. When my phone rings I feel like I have to answer it. Not to mention the fact that I am really good at answering the phone in the early morning or late night hours. So, if answering the phone makes one qualified to be president, write me in because I would be excellent at that!

And what is the deal with Barak saying he stood up against the war in Iraq and that he showed better judgment by being against it when he wasn’t even in the Senate when that vote was cast? Can someone help me with the rationale for that argument?

Barack Obama Music Video – Move it From Yes We Can to Here’s the Plan

Every time I hear an audio bite or a video clip of Barack Obama I don’t hear any policy. Not a single plan. I hear hope, hope, hope, change, change, change. He is running off a flashy image and charisma but I have no earthly clue what he would do as president. They say the best predictor of future behavior is past behavior. Given the fact that he has the most liberal voting record in the Senate what does that say about where he would take this nation?

Barack, educate us. Teach us how to achieve this lofty vision of hope you keep talking about. Stop telling us “Yes we can.” We get it. We can do it if we band together, break down walls, and shoot for the stars. But what are we aiming for here? You have convinced us we can pull the trigger on change but would you let us know what it is you want us to aim at? What is hope when you don’t know what you are hoping for? You say we can heal this nation. Yes we can, but how and from what? You say we can heal this world. Yes we can, but what is the plan?

I think the cry needs to develop past “Yes we can” to “Here’s the plan.”

It is nice that you have celebrities in your video like Jesse Dylan, Common, Scarlett Johansson, Tatyana Ali, John Legend, Herbie Hancock, Kate Walsh, Kareem Abdul Jabbar, Adam Rodriquez, Kelly Hu, Amber Valetta, Eric Balfour, Aisha Tyler, Nicole Scherzinger and Nick Cannon and everything. It is a nice start but the true mark of a leader is not found in the ability to formulate moving and timely speeches or celebrity filled music videos. The mark of a true leader is the ability to rally people together around a common vision that is backed by a realistic and well communicated plan of action and that, without the push and drive of the leader, might never have the momentum to ever be accomplished.

I bet Hillary Clinton is pulling out her hair that she is losing to a junior senator who is passing her in the delegate count based on charisma.