America is the greatest country in the world yet our continued greatness is threatened by our growing national debt. Fiscal irresponsibility can cause a great nation to decline. As our debt piles up, the more we have to pay to service it, the less money there is for defense, education and other programs.
In 1965 mandatory spending consumed over a third of the federal budget and today it is approximately two-thirds. In nineteen years there will be no funds left over in the discretionary budget which funds our armed forces.
An example of rising deficits:
o 2014 U.S. Budget $3.9 trillion
o 2014 U.S Revenue $3.023 trillion
o 2014 U.S. Deficit $483 billion
Source: US Government and usdebtclock.org
Listed below are areas (including but not limited to) that the government with support of Americans, has the opportunity to improve on, which will have a positive impact on national debt reduction.
o Decrease Size and Scope of Government Immediately
o Strengthen Economy
o Reduce Deficits
o Reduce Debt
o Reduce Interest on National Debt
o Fiscal Responsibility
o Short / Long-Term Fiscal Stability
o Reform Entitlements
o Eliminate Government Waste / Fraud / Corruption
o Reform Government Subsidies
o Financial and Regulatory Reforms
o Change Culture of Spending in Washington
o Cap Discretionary Spending
o Post all Congressional Bills Online and in Print
o Run the Country as a Business not a Piggy Bank
o Freeze Domestic Discretionary Spending
o E-form Unemployment
o Maintain Low Interest Rates
o Rein In Cost Overruns
o Permanently Eliminate Earmarks
o Reform Social Security
o Reform Medicare/Medicaid
o Reform Illegal Immigration
o Lack of Leadership
o Eliminate Outdated Programs and Departments
o Eliminate Bailouts
o Eliminate All Stimulus Programs
o Eliminate Riders to Bills
o Advocate Tort Reform
o Government is Holding Down Growth
o Eliminate Duplicity
o Freeze Construction of All Government Buildings
o Sell Government Land and Buildings
National Debt / Hyperinflation: To get the economy really moving we have to be very careful that we do not get hyperinflation, which will cause interest rates to go up considerably having a massive negative impact on our debt repayment.
Fiscal Responsibility: The United States public debt is the sum of all securities issued by the United States Treasury and is also referred to as the national debt. Our national debt should be a major concern to all Americans.
o Reduce government spending
o Reduce income and capital gains marginal tax rates
o Reduce government regulation of the economy
o Control the money supply to reduce inflation
When the government spends money, the economy goes down, unemployment goes up and taxes go up. Why does that happen? The government does not create jobs; they destroy jobs when they spend money because they take it from the private sector.
Interest on National Debt: In ten years our country’s interest payments on the national debt will be almost four times what we spend on education, energy and transportation combined. What is alarming is that the net interest spending today is at historic low interest rates, which obviously will rise then the U.S. goes into an inflationary cycle.
Ultimately, the huge national debt will increase interest rates, and the U.S. will then be in a vicious circle of competing with other nations to borrow money. High interest rates would slow down our economy as it would cost not only businesses more to invest but for families to purchase homes and cars.
Regulatory Reforms: The Obama administration’s proposed financial regulatory reforms are idealistic but not practical. If the reforms are adopted, regulators would have almost unlimited power to micromanage or take over financial institutions. What should be done is to update bankruptcy laws that are outdated to expedite restructuring and closing today’s large and complex financial firms so that we will never again find ourselves bailing out financial firms. Congress should set capital standards so that never again will the possibility of a financial firm’s failure endanger the entire financial system.
Subsidies: January 22, 2010, is the day the federal government added its 2,000th subsidy program for individuals, businesses, or state and local governments.
The number of federal subsidy programs soared 21% during the 1990’s and 40% during the 2000’s. There is a federal subsidy program for every year that has passed since 1AD – food stamps, the National Endowment for the Arts, etc.
Entitlements: An entitlement is a guarantee of access to benefits because of rights or by agreement through law. It also refers, in a more casual sense, to someone’s belief that one is deserving of some particular reward or benefit.
Tax Increases / Budget Deficits: John Stossel echoes Frédéric Bastiat when he says that the worst part of government is not what is seen but what goes unseen. Namely, even worse than tax increases collected to pay for budget deficits is the government spending that caused and continues to cause such deficits. The public notices when more money is taken from them but they rarely see how much the government actually spends.
Government Waste / Pork / Cost Overruns: Government waste increases our national debt. Special interest groups, pork barrel spending, special projects that do not create jobs, graft and corruption are examples of this waste. It is amazing how our government has such massive cost overruns when they do a project, as they are not spending their own money unlike a private company. Unfortunately, this is bureaucracy at its worst as there is no incentive to do a job cost effectively. It is more a function of taking care of the contractor and not the taxpayer.
The Community Investment Act: The Community Investment Act in the 90’s was overly aggressive in relaxing banking regulations giving loans to people who could not afford them and lowered the debt ratio for banks allowing them to approve more high risk loans and derivatives and to support the irresponsible lending of Fannie Mae and Freddie Mac. Real estate is not a right but a privilege that people earn. Our government virtually gave ownership to everyone, and they created a monster that has had a profound impact on our citizens because of high unemployment, foreclosures.