It’s like trying to fill this sinkhole with an eyedropper:
You’ll just get sucked down into it yourself.
No matter how much of our citizens’ hard-earned money we attempt to extract, there just isn’t enough of it to make a dent in the problem. That is true even before we take into account the massive disincentives imposed by tax rate increases.
…The Democratic Party has apparently been endowed with the ability to use the old Jedi mind trick. That’s their entire tactic throughout the fiscal cliff debacle. America faces actual liabilities of $86.8 trillion. That’s our outstanding cost on Social Security, Medicare and other retirement benefits accrued. There’s no way to tax ourselves out of that hole. As former chairman of the Securities and Exchange Commission Chris Cox and former chairman of the House Ways and Means Committee Bill Archer wrote this week, “to collect enough tax revenue just to avoid going deeper into debt would require over $8 trillion in tax collections annually.” To put that in perspective, the entire GDP of the country last year was about $15 trillion. Just to keep up with our debt — to keep it from growing — we’d have to take more than half of all American wealth. Every year. And that wouldn’t even solve our current debt issue.
Republicans sense that this is something of a problem. That’s why they aren’t going along with President Obama’s class warfare shtick, in which Obama pretends that taxing rich people without cutting anything will solve all our problems. Obama’s proposal to tax the top 2 percent of income earners accomplishes precisely nothing — or, even more precisely, it would pay for about eight days of federal government spending.
So how is it that Democrats seem to be winning the battle over the fiscal cliff? Polls show that Americans think Republicans are being stubborn to insist on cuts rather than going along with President Obama’s ridiculous scheme to tax and spend more.
Why? The Old Jedi Mind Trick.
That trick relies on Americans not wanting to see plain facts before them. Republicans point out the vast debt, the fact that Social Security and Medicare will soon be bankrupt. Democrats tell happy stories straight from Kim Jung Un’s Unicornland, where Social Security and Medicare require no serious reform. “No,” said Harry Reid about Social Security last week, “it’s not in crisis … It’s fully funded for the next 40 years.” Sure it is, where the unicorns roam free. In reality, Social Security is already running in the red. In 2010, the federal government had to borrow $37 billion just to pay those already receiving benefits. But the American people want to hear that Social Security works, so they listen to Reid’s trick…
More here.
Is there any reason for today’s Americans to care about what happens to tomorrow’s Americans? After all, what have tomorrow’s Americans done for today’s Americans? Moreover, since tomorrow’s Americans don’t vote, we can dump on them with impunity. That’s a vision that describes the actual behavior of today’s Americans. It would be seen as selfish, callous and ruthless only if it were actually articulated. Let’s look at it.
Businesses, as well as most nonprofit enterprises, by law are required to produce financial statements that include all of their present and expected future liabilities. On top of that, they are required to hold reserves against future liabilities such as employee retirement.
By contrast, the federal government gets by without having to provide transparent and honest financial statements. The U.S. Treasury’s “balance sheet” does list liabilities such as public debt, but it does not include the massive unfunded liabilities of Social Security, Medicare and other federal future obligations. A conservative estimate of Washington’s unfunded liabilities for the year ending in 2011 is $87 trillion. That’s more than 500 percent of our 2011 GDP of $15 trillion.
Former Congressmen Chris Cox and Bill Archer have written an article — “Why $16 Trillion Only Hints at the True U.S. Debt,” The Wall Street Journal (November 26, 2012) — pointing out our dire economic straits. They say, “When the accrued expenses of the government’s entitlement programs are counted, it becomes clear that to collect enough tax revenue just to avoid going deeper into debt would require over $8 trillion in tax collections annually. That is the total of the average annual accrued liabilities of just the two largest entitlement programs, plus the annual cash deficit.” Let’s analyze that.
Washington would have to collect $8 trillion in tax revenue, not to pay off our national debt and have reserves against unfunded liabilities, but just to avoid accumulating more debt. Recent IRS data show that individuals earning $66,000 and more a year have a total adjusted gross income of $5.1 trillion. In 2011, corporate profit came to $1.6 trillion. That means if Congress simply confiscated the entire earnings of taxpayers earning more than $66,000 and all corporate profits, it wouldn’t be enough to cover the $8 trillion per year growth of U.S. liabilities.
Given this impossible picture, the message coming out of Washington, especially from our leftist politicians and the news media, is that we solve our budget problems by raising taxes on the rich. If Americans were more informed, such a message would be insulting to our intelligence. There are not enough rich people to satisfy Congress’ appetite…
More here.
Although I don’t agree with everything that Bill Whittle says – from a financial perspective, he’s spot on:
Published on Nov 12, 2012 by Pajamasmedia
In his first Afterburner since the election, Bill Whittle weighs in. Now that Barack Obama has been reelected president, ObamaCare is certain to remain unchanged. Bill thinks this is the first step towards massive tax increases, socialized health care, and a citizenry more dependent on the federal government than ever. So although the foreseeable future of our great country may seem grim, hear why Bill thinks patriots must continue to fight the good fight for the duration.
