I'm a numbers guy, so here is why I'm worried about debt and taxes...
Our federal debt is currently about $16 trillion. That excludes estimated shortfalls to social security and Medicare.
According to the attached link, MSNBC reports that the estimated shortfall for Social Security and Medicare is $31.5 trillion for the next 75 years (that's one of the lower estimates I've seen, but let's use it).
Medicare's deficit 7 times Social Security's - politics - msnbc.com
So, that's a total long term debt of 16 trillion + 31.5 trilion, which equals $47.5 trillion.
Are we addressing that today? Hell, no. Because of record-level spending and sluggish tax receipts, we are expected to add more than $1.3 trillion to the debt in 2012 (tax receipts of $2.5 trillion, spending of $3.8 trillion).
Historical Federal Receipt and Outlay Summary
There are 300 million Americans. That $47.5 trillion debt works out to $158,000 per person. That means that over the next 75 years, every single man, woman, and child needs to pay an additional $158,000 in federal taxes, ON TOP of current tax rates. And that's only if we assume the following...
- that every year for the next 75 years, the feds won't spend one cent more than they collect (which will never happen), and
- that we don't have to pay any interest on that debt (which we do), and
- if we assume that every cent of the additional taxes will be used to pay down that debt (which it will not).
This also ignores the staggering debt that is challenging most states and cities across the country.
There are 2 ways to address this. You can collect more tax dollars, or you can reduce benefits.
Obama likes to go on and on and on about eliminating the Bush tax cuts on the wealthy, which he says will increase tax revenue by $90 billion a year. Whoop-dee-do. That $90 billion represents a whopping 7 percent of the estimated 1.3 trillion shortfall for 2012 alone. Without cutting spending, we need 14 times that amount (14 x $90 billion equals $1.3 trillion) just to break even this year, not allowing for one cent extra to pay down the long-term debt. Inescapable conclusion? We can not, ever, ever, EVER, tax our way out of this.
How did we get into this mess? A generation of politicians has known, for decades, that this was coming (it's all because of the huge number of Baby Boomers, as well as advances in medical technology, which prolong life, but are very expensive)). But rather than make tough decisions, the politicians chose to ignore the problem, hoping that would increase their chances of getting re-elected.
Today, every once in a while, you see a politician with the intellectual honesty to admit the sad truth that these programs cannot continue at current benefit levels (Paul Ryan recently did this). When the politician (usually a Republican) says this, politicians from the other party (usually Democrats) make commercials of the honest politician, showing him pushing an old lady off a cliff. Liberals, in a well-known act, recently did exactly this to Paul Ryan. Liberal politicians and media personalities accused Ryan of not caring about the needs of the old and the poor. They accused Ryan of setting out to destroy Medicare and Social Security, when in fact what's destroying those programs, is 50 years of politicians who cared more about getting elected than they cared about making the tough decisions.
I'm curious what liberals here, like PaulS, Spence, Zimmy, and Likwid, think of this.
Do you guys disagree with my numbers? Do you disagree with the magnitude of the problem? Do you feel, like Obama seems to feel, that we can solve this by tweaking tax rates on a small number of very wealthy people?
I see this debt as a disgrace. I have 3 kids under the age of 6, and as of today, each of them owes $158,000 to the feds, on top of what they'd pay at current tax rates. No one asked them if it was OK befiore we spent that money.
The problem will get alleviated, somewhat, when the 2 wars end, and when the economy picks up steam. That will put a dent in our debt, but not a big dent. Not when we're adding $1 trillion a year to the problem.
Both parties got us into this mess. Only one party is talking about what needs to be done to get us out. Republicans talk about what needs to be done. Democrats point to those Republicans and say "See! I told you! He wants to do away with programs that help old people and sick people! Vote for me, keep that boogeyman out of Washington!"
The liberal position on this issue (i.e., keep spending more than we have and hope that the problem somehow goes away, and keep demonizing those who want to address the problem) is stupifying to me. It's so deranged, it's the main reason why I say liberalism is a mental disorder. I haven't seen a thoughtful post on this hugely importanmt issue, so I'm trying to start one.
How can the liberals here defend what the Democratic party, at the national level, is doing about this?
I fail to see how this doesn't end with astronomical tax rates for all. I have all of my savings (retirement and kids' college)in after-tax accounts, so they will be untouchable. I have zero doubt that will save me a fortune when I'm older. I'll pay my taxes now, not later. But I cannot stand the problem that we're leaving to our kids.