There is so much debate today about taxes — the question always framed as “who should the government tax” for more Benjis — so that the government can reap more money that it can subsequently spend it on all kinds of “worthy” things. This is the wrong question.
The imbalance is unsustainable and taxes are not the answer. Here is the math in easy to understand terms:
For every $100 Ben Franklin that the United States government spends today, $60 comes from taxing hard-working Americans and American companies and $40 is borrowed.
Imagine that your 25 year-old daughter is gainfully employed at Bank of America and bringing home $60,000 a year. So far so good. But she is borrowing $40,000 a year and spending every penny of it, living in a swanky high-rise condo near the fun downtown district, taking lots of beach vacations, and driving around town in a new Porsche convertible. This year, she runs out of commercial lenders that will loan her the money, so she comes to you to borrow the $40 grand to keep her life rolling. What would you say? How long will her spendy lifestyle last?
In Washington, our Representatives are arguing about how to increase the income side of the ledger. Given the 60/40 reality, taxes would have to double so that we could meet this budget and start paying back the trillions already blown.
The answer is obvious: Spend a heck of a lot less. 40% less would be a great. Period.
Quit playing stupid games with raising taxes. More and more taxes sinks a country. There are always unintended consequences. Here is a good article that shines the flashlight on the unintended consequences of poorly thought-out taxation. Let Americans decide where they want to spend and invest their Benjis. More taxes simply means that the government decides where your money gets spent.
Even at $14,000,000,000,000 (wow!), our debt is still manageable because we have a big, successful country. Lots of people have mortgages several times larger than their annual income. Our debt today is about equal to our annual GDP which isn’t great but isn’t the end of the fiscal world either. But it is high time to curtail the growth in the debt.
If our government spends a lot less, our kids will have a brighter future. I am optimistic that it will happen, because common sense says that the current 60/40 scenario is unsustainable.
I.M. Optimism Man
PS> By the way, do you ever wonder who we owe all the money to? Our representatives and the media like to yell “the Chinese” at the top of their lungs, because they know it will get a rise from the citizens. Just in case you are interested in facts over political spin, see a clearer picture below:
Who we owe doesn’t change the fact that government must spend a lot less per year.