In 2007, tax revenues in this country from all sources were $2.57 Trillion. Total government spending was $2.73 Trillion. The net effect was that we went $162 Billion in-the-hole. All reliable projections point to the unfortunate truth that spending at levels consistent with our current commitments will continue to out-pace revenues by an ever greater percentage in the coming years.
Simply put, there are 4 factors in this equation that can be manipulated to change the outcome. We can scale back or eliminate entitlements, cut discretionary spending for things like education and military, raise taxes, or grow the economy to produce a larger tax base. I believe most of us would prefer the last option, but in reality the solution will require some manipulation of all these factors.
Barack Obama is running on a platform of change. The change he proposes amounts to approximately $1 Trillion in additional spending over the next 4 years. His plans include a $65 Billion-per-year health plan, a $15 billion in green energy stimulus spending, $85 billion in tax cuts and credits to lower income brackets, a $25 billion-a-year increase in foreign aid, $18 billion a year in increased education spending, and $3.5 billion for a national service plan. All this and more, even before anyone else in government comes to the table with a wish list.
Many in our country want to turn a blind eye to our dire financial realities. Mr Obama and others of his ilk want to lead the charge by promising to deliver more things to more people, at taxpayer expense, and dig us into an ever deeper hole. There simply is no way to pay for it all without dramatically raising taxes on all the productive citizens and businesses in this country. If the Obamas of this country are elected, government will grow, entitlements will grow, our deficit will grow, and the tax increases needed to support it all will stifle any potential growth of our economy.
Have you ever dug yourself out of financial hole? If you are honest, you will admit digging out meant working more, saving, spending less, and generally living within your means. I seriously doubt most of us would consider borrowing more, or taking from others to be the solution. Why should we support representatives and a government in Washington that would behave any other way. The language of hope and change is nice, but those of us who run a household or a business know that talk of hope and change is not enough to get the job done. Digging out of a hole requires spending less money, and creating more wealth; it is as simple as that. Irresponsible promises, trying to be everything to everybody, unchecked spending, and crippling taxation are a recipe for disaster. Real hope and real change will require all of us to pitch in to work, grow our economy and urge those on entitlements toward greater independence and productivity.
Please remember the truth of the acronyms I wrote about here. And come November, my HOPE is you will choose the candidate who is honest about where we stand and what kind of CHANGE it will take to recover, rather than the one who is promising hope and change by telling you what you want to hear.
If you would like to learn more about the economic realities facing our country, please visit www.perotcharts.com