BLOGS FROM SIDNEY

On the Left Side

Sidney

A Guaranteed Debt Solution

Blog From
April 13th, 2011

We’ve got debt problems coming out of our ears. Everyone knows it and most of us have our own ideas about how to deal with it. Even politicians are finally, albeit very reluctantly, making noise about the yawning ugliness of our massive federal money pit. But, that’s only because they can no longer run away from it. Everyone also knows there’s very little agreement across the political spectrum on what to do about it. Tax and keep spending or cut, cut, cut. Whatever shall we do?

I have a great idea; fair to all, guaranteed to solve our money problems and very simple. But, before we get to what the solution is, let’s review why we need it. Knowing why something needs to be done makes the choice a lot clearer. The first part of the why is to end the “raise taxes vs. cut spending” war of words. And they are just meaningless words since it goes without saying that spending must be cut. A tax raising solution is stupid because, eventually, we’ll run out of money. Of course, running out of money solves the spending problem, too. Raise your hand if you think that’s a good idea.

How much money do we have to cut? That’s answered by the size of the debt. Today, it’s over $14 trillion. By 2020, it will be over $21 trillion as spending continues to increase. To put that into perspective, the projected 2011 tax revenue for the Feds is about $2.57 trillion. That means the current debt is more than five times this year’s revenue. By 2020, it will be eight times greater. In that year, just the interest on the debt will burn through annual Federal revenue and a lot more. How does paying interest on the interest sit with you?

To figure out how much spending we have to cut, let’s look at it like a grade school arithmetic problem. If a speeding debt is racing towards you at 21 trillion miles per hour and your back’s to the wall, when will it flatten you? Never, if you blow it up first. Where do we put the debt-busting fuse? Under the biggest piece of the spending pie, of course. The rest of it is peanuts by comparison so cutting in those places, while helpful, doesn’t get the job anywhere near done.

The biggest piece of the pie is the collection of sections known, inappropriately, as “entitlements”. As if anyone has the right to use Uncle Sam’s long arm to lift your wallet. We really do need to put our brains back in gear, people. “Entitlements” is just a successful marketing term. It gets us to buy into paying more than our their fair share for the upkeep of people who pay nothing at all. Like, say, a family of four making $50,000 annually.

But, how are we going to cut welfare payments when politicians have been increasing them for decades to get elected? Look at Obama’s irresponsible budget proposal. Or at the teeth gnashing going on now about cutting spending over the next ten years by less than this year’s deficit. Remember a couple of years ago when the media was taunting us about being addicted to welfare? According to those guys, we will never reduce payments once we have them. They’re going to have to be very wrong about that.

So, here’s the solution. It stops campaigning for votes in exchange for greater welfare largesse and it keeps people who don’t pay into the system from controlling your wallet. If you don’t pay federal taxes, you don’t vote in federal elections. By “pay taxes”, I don’t mean the more than fifty million American households that file returns but, thanks to tax credits, pay zero dollars. I mean people who have less money than they otherwise would have because the taxman actually takes it away.

Fair’s fair. No skin in the game? You don’t get to be a signal caller. It will take a constitutional amendment, of course, but, with almost half of American households paying no taxes, there’s no time like the present. We’ll see how long the debt lasts when people who pay have the say.

See you on the left-side.


 





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