Democracy and Power 104: Future Debt Burden

A government debt is a government claim against personal income and private property – an unpaid tax bill. – Hans F. Sennholz

During the course of his presidency, Mr. Obama will increase the national debt over $5 trillion.  By the end of 2012, the total of United States government debt  will be at least $15 trillion.  Don't forget, this is an unpaid tax bill – a claim against every American’s personal income and private property. 

Twice in the past two years, President Obama has nastily attacked Representative Paul Ryan’s proposed budgets.  In this year’s attack on Representative Ryan and the Republicans, Mr. Obama spoke of two visions for America.  As reported by Politico: 

“I can’t remember a time when the choice between two competing visions of our future has been so unambiguously clear.” …

Mr. Obama is almost correct.

However, rather than visions, there are two competing fiscal plans.  President Obama intends to increase spending and debt.  Representative Ryan, approved by the House Republicans, offers a path to reduce America’s spending and debt.  Ryan sets guidelines for areas of federal spending – health, entitlements, defense and the list is almost endless.  Additionally, Mr. Ryan proposes tax reform, correcting an inefficient and corrupt code.  Within 10 years, Ryan's plan reduces the spending-to-GDP ratio closer to historical rates.

Our law requires President Obama to submit a budget.  His budget increases the rate of spending, does not reduce the debt and maintains high spending-to-GDP ratios.  The President’s previous two budgets were so poorly constructed that they were unanimously defeated –  Republicans and Democrats -  by the Senate in 2011 and the House in 2012. 

Yes, these votes were political theater, but also demonstrate the insignificant elements of the President’s fiscal plan. Thus, the President’s fiscal plan is to spend more and more while continuously repeating the sound bite “tax the rich – their fair share.”

Meanwhile, the debt piles up and up and America is fiscally spiraling down to likes of Italy, Spain and Greece.   The President and his administration know America’s debt is enormous and very dangerous, but they intentionally increase the rate of spending. 

Additionally, Mr. Obama knows, with his spending expansion, averting financial devastation requires new and additional taxes.  Thus, money must be extracted from the American public.   Mr. Obama knows that if the government confiscates all the wealth of the rich, there is still not enough to cover America’s debts.  Realistically, the new tax increases will impact every American.  Almost every American will pay more taxes.  Additionally, the increased tax burden will reduce savings, investing, and economic growth.  America’s standard of living will continue to stagnate...at best.  

Still need explicit examples of increased taxes to pay for government debt? Last year, Illinois increased their income tax by 66%.  A debt-plagued California is attempting to increase their top rate on income from 10 to 13%.

Stripped of all the political rhetoric, Mr. Obama intends to keep spending, and, after the election, America will be forced to increase taxes.  In comparison, Mr. Ryan has proposed a budget process to reduce the growth of government spending and reduce the debt without tax increases.  Please note, FreedomWorks and the Tea Party Debt Commission assert that the Ryan/Republican proposal falls short of necessary reform.  Unfortunately, until November’s election is over, the debate will be focused on Ryan/Republican budget and the President’s demagoguery of their plan.

Again, the President ridiculed Mr. Ryan and his budget last year, and the President continued spending. This year, the spending and the debt continue to explode.  Unfortunately, demagoguery and political theater is also detonating.   Now the President claims:

"In the months ahead I will be fighting as hard as I know how for this truer vision of what the USA is all about.”

Without a doubt, you will not hear about his future tax increases.   You will hear deceptive sound bites from Obama’s campaign spokesman Ben LaBolt, such as the following:

“It was very important to highlight that contrast because this is going to be a discussion throughout the campaign,” LaBolt said, calling the Ryan plan “One Flew Over the Cuckoo’s Nest-style fiscal insanity.”

So much for transparent governance and an honest discussion!