Tag Archives: debt crisis

Solving the Debt Crisis

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Author: R, Alan Harrop

The current debt default discussion is a good time for us to take an honest look at the extent of the problem. Here goes. The total federal debt in 1993 was 4.3 trillion dollars, today, thirty years later the debt is 32 trillion dollars. That is a 744% increase. It amounts to $91,430 for every man, woman and child. However, since only about 150 million people pay federal taxes, it amounts to $213,000 per taxpayer. I strongly suspect that your income and net worth has not increased 744% in the past 30 years. If you took the national debt of 32 trillion dollars and stacked them up, the stack would be 2,584 thousand miles high or 11 one-way trips to the moon. Clearly, this is unsustainable.

The question is, what do we do about it. As Reagan once said: “The federal government does not have a revenue problem, it has a spending problem.” Assuming our elected leaders are serious about stopping this reckless spending (which is questionable at best), here are some things that can be done: (1) Reduce the budget of all federal agencies by 5% a year, exempting the Department of Defense. (2) Eliminate the federal Department of Education, which has a budget of $87 billion dollars. This agency was started during the Carter administration and is not needed, since the states have constitutional authority over education. (3) Reduce the budget of the FBI by 50% and refuse to fund their request to fund a new headquarters that would be larger than the current Pentagon. This should include removing arresting authority (started in 1934) from the FBI and returning it to a strictly investigative body with arresting authority remaining with local law enforcement. (4) Eliminate granting welfare, and other social programs to illegal aliens. They broke the law to get here and should be identified and returned to their country of origin. Illegal aliens currently cost the taxpayers $151 billion each year, and that number is growing exponentially. (5) Implement a strict work requirement for any healthy person who is currently receiving welfare payments. Too many people are staying home and refusing to take available jobs. According to the Heritage Foundation, the average family of four receives over $70,000 in total welfare payments per year. (6) Stop weaponizing non-law enforcement federal agencies such as the IRS, State Department, Dept of Commerce, etc.

There are plenty of other places to cut spending, such as grants to various institutions. This represents only a partial list of what could be done and needs to be done before the entire system collapses. No sane individual would run their household budget like the politicians run the federal government. Much of this wasteful spending is initiated and passed to help politicians get re-elected. This is one of the main reasons why there is increasing demand by some for term limits. The Republicans in the House are fighting to at least begin the process of controlling spending. Let’s hope they succeed.

What is long overdue, is an amendment to the Constitution requiring a federal balanced budget. A Convention of States may be the only way this will ever be accomplished.

 

The Uni-Party Needs To Be Voted Out Of Office

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The Washington Examiner posted an article today with the following headline, “Republicans join Democrats to kill Rand Paul’s fiscally responsible Pennies Plan because no one cares about the debt crisis.”

As of today, the national debt of America is approximately 22 trillion dollars. That’s a lot of debt for our children and grandchildren to be saddled with.

The article reports:

That was a nice decade of Republicans pretending to care about our $22 trillion national debt and annual multitrillion-dollar deficit. But as of Monday, we can safely say the Tea Party is over.

Sen. Rand Paul, R-Ky., introduced about as reasonable an attempt to rein in our exploding deficit with his Pennies Plan, which would cut 2% from on-budget spending per year for the next five years. Additionally, Paul’s plan would expressly protect Social Security, include instructions to make the individual income tax reforms passed by President Trump permanent, and expand access to Health Savings Accounts.

It’s a modest but tangible step in the right direction. It wouldn’t solve our debt crisis, but it would ameliorate it somewhat. So naturally, a large bipartisan majority voted to block it from the Senate floor.

Just 22 Republicans proved themselves to be great American patriots. Sixty-nine senators, including a whopping 25 Republicans, voted not to bring the bill to a final vote.

What are we voting those 25 Republicans into the Senate for? Conservatives tell me that Sen. Josh Hawley, R-Mo., is the next big thing. But while he’s found the time to nearly derail Trump’s exceptional judicial agenda and threaten to go full-big-government on private social media companies, he refused to bring the Pennies Plan for as much as a floor vote.

It is time for those who formed the Tea Party Movement in 2009 to rename and rebrand their movement and work to shrink the cost of government. Increasing debt is not a workable financial model. It is time to elect legislators who will actually keep their promise to shrink government–not grow it. There is something in the water in Washington that causes people who run as conservatives to forget who put them in office. We need to keep voting them out of office until we find someone who knows how to keep his promises.

A Short Primer On The Debt Crisis

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Last night Hugh Hewitt spent three hours with Representative John Campbell talking about the debt crisis.It was an amazingly educational show.

Representative Campbell’s House of Representatives web page lists some of his committee assignments:

As a member of the House Committee on Financial Services, he has taken an active part in addressing the country’s top economic issues, including mortgage lending, corporate governance, banking reform, and insurance regulation. Through the recent economic crisis, he was influential in the responses to the crisis that averted a collapse in our markets and economy. Currently, he serves on the Capital Markets and International Monetary Policy subcommittees.

John also serves on the House Committee on the Budget, where he has had a hand in crafting portions of The Roadmap for America’s Future.  This plan championed by Congressman Paul Ryan contains a comprehensive proposal to ensure health and retirement security for all Americans, to lift the debt burdens that are mounting due to reckless spending, to reform and simplify the tax code, and to promote jobs and competitiveness in the 21st century global economy.  John is also a leading author of the Taxpayer Choice Act, which would make America’s tax system simpler and fairer by providing the opportunity to take advantage of an optional flat tax, in addition to repealing the Alternative Minimum Tax (AMT).

As a Certified Public Accountant and a former small business owner, Representative Campbell provided a lot of insight into where we are in terms of our current financial crisis.

America crossed over its debt ceiling of $16.4 trillion on December 31st. What that means is that the government cannot issue any new debt. The government is required, at least temporarily, to live within their means.

There were three main points to the discussion:

1. The debt crisis is coming and it could occur at any moment.

2. The debt crisis is caused by a spending problem–not a tax problem.

3. There are immediate spending reforms that would address the problem.

One of the things that I learned from the program is how Washington spends money. There is discretionary spending and mandatory spending. Discretionary spending includes defense, government agencies, etc. Mandatory spending includes all entitlement programs. The three main entitlement programs are Social Security, Medicare, and Medicaid. Other entitlement programs include food stamps, student loans, etc. These two types of spending are funded in different ways–discretionary spending has to be approved by Congress every year and signed into law by the President. Mandatory spending is already law, and unless Congress acts to change it, the spending automatically occurs.  Therefore, when President Obama says that raising the debt ceiling is only paying the bills that Congress has voted for, he is not being entirely accurate.

We are in financial crisis. Unless the spending is slowed, we will continue to see high unemployment and slow economic growth. Until more Americans begin to pay attention and vote for economic growth, rather than against it, America will continue to decline.

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