We could eliminate the entire Federal Government except for entitlement spending and interest on the national debt, and we would still have to borrow money to pay for it.This is what happens when you elect politicians who can't (or won't) do math...
The president’s proposal for increasing taxes on "the rich" would bring in an extra $40 billion dollars next year. So, instead of borrowing $1.1 Trillion next year, we’ll only have to borrow $1.06 Trillion. Somehow, we are told, this will be massively helpful.
Meanwhile, if interest rates return to their historic average levels the cost of debt service alone will rise from $250 billion per year to $750 billion per year.
But, really, anyone who isn’t as dumb as a bag of hammers already knows that the amount of government we have is unaffordable, simply by noting that we’ve increased the national debt from $1 trillion to $16.3 trillion since 1980. It took us 190 years to accumulate $1 trillion in debt. And 32 years to multiply it more than 15 times.
We have three choices. We can cut all Federal spending by half. We can have massive tax increases on the middle class. We can do nothing and eventually default/hyperinflate our monetary and financial system away.
Based on the politics of 2012, I assume it will be the latter.
Monday, December 24, 2012
Why the entitlement society is unsustainable: