America's Looming Debt Crisis

America's Looming Debt Crisis
Out of Control Government Spending Will Bankrupt Us All
by Mark Luedtke

I hope you have a spare $400,000 laying around because that's your share of the US government debt. The US government is bankrupt to the tune of $58 trillion, and in order to pay off that debt, every household in America would have to pay $400,000 today. Because long-term debt compounds just like interest, the debt increases $2-3 trillion per year, so every year we wait to fix the problem, the more painful solving it becomes. The looming debt crisis is the greatest threat facing America, and few people know it because few people talk about it. This isn't the short term economic problem discussed on the news. It's been nearly a century in the making, and requires a long term commitment to fix.

David Walker recently resigned from his office as US Comptroller General in the Government Accountability Office. Mr. Walker was the government's top accountant, appointed to a 15 year term during the Clinton administration. While Mr. Walker was in office, he crusaded against rampant government spending, informing every official in Washington that the US government was already bankrupt. Our representatives tried to silence him, ignored the problem, and continued irresponsible spending.

Frustrated by government officials but protected by his 15 year term, Mr. Walker took his crusade to the people. He toured the country for the last several years, lecturing on the consequences of our rapidly increasing debt. He explained the country can never afford to pay for the entitlements promised to the baby-boomers, who started retiring this year, and future retirees.

Despite Mr. Walker's best efforts, you probably never heard of him or of the debt catastrophe. Because our government actively tried to suppress Mr. Walker's crucial message and because the press largely ignored him, Mr. Walker resigned his office to take a position at a new think tank to address the problem.

Here's few facts from an appearance by Mr. Walker on the Glenn Beck show, explaining the more painful costs to fix the problem in 2008 versus if we had fixed it in 2003:

• Increase federal income taxes by 74% versus 69%
  

• Increase payroll taxes by 103% versus 95%
  

• Cut federal spending by 115% versus 106%
  

• Cut Medicare and Social Security by 47% versus 45%
  

Raising taxes that high would drive us deeply into recession, accelerating economic collapse. The best option to avoid the looming debt crisis, which could make the Great Depression look like a bad week at work depending on how long we take to address it, is to dramatically cut current government spending and future entitlement benefits while simultaneously deregulating business and reforming the tax code to free Americans to make more money to increase revenue. Drastically cutting spending is inevitable. The only questions are when, how we manage it, and how much pain we suffer.

Ronald Reagan warned us of impending entitlement collapse decades ago. He explained, "government is not the solution to our problem; government is the problem." 28 years later, government spending is more irresponsible than ever. Now, American uneasiness about the economy stems directly from the initial tremors of the predicament. On 2/27, Federal Reserve chairman Bernanke warned of increasing inflation while simultaneously signaling a rate reduction. A century of runaway government spending, punishing income taxes, restrictions on our economy, and an oversupply of dollars to hide the problems have put our economy in an untenable position. If Bernanke reduces rates to keep the economy growing, rapidly increasing inflation and the devaluation of our currency will accelerate. If he holds rates steady, we'll sink into recession.

The FDIC is bringing workers out of retirement in expectation of an increase in bank failures. Food prices are soaring. The Euro surpassed $1.50. Gold is nearing $1000 an ounce. Oil surpassed $103 per barrel. The Wall Street Journal just reported that US government expenditures on health care alone will grow by over $2 trillion dollars by 2017, and that doesn't include the new health care spending proposed by the presidential candidates.

This collapse of the dollar is the start of our economic collapse. The collapse of our credit rating would follow, and Moody's recently warned that our AAA credit rating is in jeopardy because of exploding debt. After that, the government will have no options but to drastically cut services and raise taxes, driving the US into depression. Large businesses, banks and pension funds will collapse, and the government will be unable to supply a safety net. We won't be able to fight terrorists. We won't be able to check Russian and Chinese aggression.

We overcame the fascists in WWII and the Soviets in the Cold War, but runaway government spending could destroy America if we don't stop it now.

But instead of proposing to dramatically cut the size and scope of government to prevent this oncoming disaster, presidential front-runner Barack Obama proposes $287 billion in new spending annually. Hillary Clinton proposes $218 billion. That's not hope but change for the worse. Both want to apply CO2 cap and trade policies that would plunge our economy into recession, further hastening the nation's collapse.

Mike Huckabee proposes increasing government spending by $54 billion for his nanny state programs, but to his credit, Huckabee supports the FairTax.. John McCain plans to increase spending by $6.9 billion, but that doesn't include the war candidate's war spending, and he wants to apply CO2 cap and trade policies as well. We can't count on miracles or wars to solve this problem.

Ron Paul is the only major presidential candidate who proposes reducing government spending. Ron Paul would reduce government spending by $150 billion, and he would abolish the income tax. As with the FairTax, American made goods and services would compete on a level playing field against the products of our trading partners. Americans would no longer be punished for success. Ron Paul understands the problem, and his plans are a good start, but he's polling at under 10% in the Republican primary.

We have to do better. Understanding the problem provides the simple solution, and the burden of government is the problem. To avoid this situation, we must dramatically reduce the size and scope of government. If we implement a plan to cut government spending in half, including entitlement spending, over the next 2 decades, we'll avoid the trouble. If we do it today, we won't have to cut existing benefits for seniors. If we also abolish all federal taxes in favor of the FairTax and cut the rate to match spending cuts, we'll return America to a trajectory of greatness, and we'll no longer have to worry about China surpassing us as the world's superpower.

If we address this problem today, Americans won't have to sacrifice to solve the problem. Just the opposite, all Americans benefit from reduced taxes, no income tax, and a booming economy. Future retirees will have greater savings and investments to more than offset benefit cuts. If we follow this plan, we'll experience an economic renaissance, job creation and wage growth, the likes of which we have never seen. We should also reduce the burden of state and local governments to further enrich and empower the people to make America even greater.

Americans make America great, not government. The burden of big government makes Americans weaker, and therefore makes America weaker. The solution for the looming debt crisis is to enrich and empower Americans by dramatically reducing the size and scope of government.