The need to deficit reduction is becoming the biggest discussion in politics these days. The nation is in a crisis and unless the political leaders change their ways, the United States is going to end up like those countries going bankrupt in the eurozone.
Written by Guest OpED
Wednesday, 08 June 2011 09:42
It is past time politicians stop the demagoguery. American’s economic crisis and the need for deficit reduction is critical. We cannot continue to spend at present levels. Our nation is in a crisis and unless we soon address the problems, we will soon be joining the ranks of Greece, Portugal, Ireland, and Spain. That is why the rest of the world is looking beyond the dollar as a reserve currency for use is pricing commodities, because the American dollar has lost its value.
One might even argue that the discord in the Middle East, which many relate to food price inflation, is directly related to the collapse of the American dollar’s value.
Since Obama instituted Quantative Easing#2 (QE2) which is a euphemism for printing $600 billion, the American dollar has steadily lost its value. Once, the Canadian dollar was 60 cents to an American dollar. Today it is $1.03 Canadian to an American dollar. That is a 43% change. Just this year the dollar has lost 7.7% of its value which accounts in great measure for the increase in food and fuel prices internationally. You can’t just print money!
The idea was to inject money into the stalled economy to prime it so it would advance. However, little growth has been achieved for all the suffering caused. This year’s Gross Domestic Product (GDP) will increase by a mere 1.8%. Considering that the total economy is about $14.12 trillion, adding $600 billion should have provided a 4.2% increase alone. By gaining only 1.8% is proof that the stimulus failed! Americans paid a lot for nothing…bad economics!
Also, Americans continually hear about our $14 trillion debt, but what are not reported are the total unfunded liabilities our nation faces. The numbers are staggering and difficult to accurately determine. Some sources place it at $14 trillion in debt, $106 trillion in Social Security and Medicare liabilities, $6 trillion in Fannie Mae and Freddie Mac mortgage guarantees, and an additional $1 trillion in unfunded retirement liabilities for government workers and the military. The grand total is $127 TRILLION of debt!!!!
As it stands that amounts to approximately $1 million per worker in America. “Tax the Rich!” some cry. Typical demagoguery. However, the numbers don’t add up. If government were to take 100% of the income from those making over $200,000 that would only pay for this year’s deficit. Furthermore, perhaps it should be noted that those making $200,000 are only 4% of all taxpayers and they already pay 52% of all tax revenues.
Interesting to note, 45% of Americans enjoy the fruits of our land, but pay NO TAXES at all!!! Indeed, many receive income tax credits (a check) amounting to thousands of dollars, but they pay nothing. This is income redistribution!
The bottom line is simple. Americans must learn to live within their means. That means we have to cut back on entitlements. Too many people are benefiting who don’t really need the help. Don’t cut back on all the benefits, but on access to the benefits. However, certainly some benefits can be reduced. Since when should Americans be entitled to cell phones??? Whose idea was that? Or, is this merely a government subsidized ploy to communicate with voters for the next election?
The Obama administration, Democrats, and Republicans must come to some agreement about America’s debt crisis immediately. The Roosevelt “safety net” has become a plush hammock for too many. Work must be tied to benefits and everyone should contribute to the tax system. Programs like having 45% of the population not paying any income taxes coupled with “tax credits” for those who pay nothing have to be re-evaluated.
If America does not stand tall and take some bitter medicine, within a few short years this nation will face bankruptcy and the accompanying social chaos such a crisis engenders. America’s debt and deficit spending is the greatest threat to our national security. Congress and this President must consider it as such or face the consequences.
Stop playing “gotcha” political games. No matter what party you represent… you will pay the price election day if you don’t address the problem now!
by Ron Chapman
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