Let us pretend that you have a neighbor down the street who continually tells you about his financial woes. He has made it clear that, although he has a good job and a steady income, he is drowning in debt. He tells you that he just worked out his spending plan for the next year and it looks as if it will cover his needs but it will also add $10,000 to his bulging debt. Your neighbor lives well—beautiful home, cars, clothes, country club—all the amenities of the good life. You, on the other hand, do not enjoy his lifestyle even though you make as much money as he does. The difference is that you live within your means and do not accumulate debt if you can avoid it. He has more toys but one thing you are quite sure of—you would not trade places with him.
Now, most of you read this scenario and tend to agree with the conclusion. So, why is it that we tolerate a government or any elected officials operating in the same manner as our unacceptable neighbor? Oh, you say, The government is not like a household and you cannot run it that way! Or maybe you think, The government is not a business—you can’t run it like an accountant! These are some of the irrational reasons we hear to justify the piles of debt this nation continues to grow. What is it about deficit spending that we just do not get? We cannot continue to spend money that we do not have whether it be a household, a business, or a government—it all works to the same end when it comes to spending money.
Today, the per capita share of the federal debt is around $57,000. That figure is almost double what it was in 2008, when Obama took office. If the past ten years are any indication, with a national debt ballooning to $24 trillion, that figure will probably at least double again.
According to studies published in 2009 by the Indiana University’s Kelley School of Business, a high school graduate in the U.S. can expect to earn an average lifetime income of $910,000. If we add two years of free college courtesy of Barack Obama and the U.S. Government, that figure increases to about $1.2 million dollars in earnings. A tax burden which exceeds $100,000 per capita takes a significant bite out of that income. You wonder what is happening to the middle income wage-earners in this nation? They are being drowned in government debt. To significantly change that scenario, the majority of Americans would have to earn a bachelor’s degree or higher, and that is not likely to happen over the next ten years unless we lower the standards and start giving them away.
Our current national debt—approximately $18 trillion—is on a par with the value of our annual Gross Domestic Product (GDP). Adding another $6 trillion in debt over the next decade will mean that unless future GDP growth increases by 3.8% year after year, the national debt will exceed GDP by 2025. Based on current statistics, that would be quite a feat and would require a sizeable investment on the part of corporate America and its domestic production. In fact, if we look at GDP growth from 2004 to the present, such an average for the future is rather optimistic.
As part of his efforts to get what he wants, Obama is using semantics to help his cause. He scolds the Republicans for their austerity efforts and attempts to paint those efforts as being the downfall of the middle class in America. In turn, he claims the cash infusion in his budget will be used to create good paying jobs throughout America and begin to rebuild the middle class. Let us understand two things here. America does not have a class system; we have statistics concerning income and wage earners. This president cannot seem to absorb that point—or maybe he wishes the American people didn’t get it either! Second, the government does not create jobs—no how, no way, not now, not ever! The government can only cultivate an economic environment that is conducive to job creation in the private sector. Obama would have you believe that the collection of taxes, the redistribution of wealth, and an increase in deficit spending is all it takes to reinvigorate the middle class. That is a total distortion.
Of course, middle class America has little or no say concerning what Obama does or doesn’t do, as he assuredly does not follow the will of the people. If that were the case, ObamaCare never would have been passed, crammed through as it was, using the Reconciliation Act. In fact, Alcee Hastings, representative of Florida summed it up this way: "I wish that I had been there when Thomas Edison made the remark that I think applies here: 'There ain't no rules around here, we're trying to accomplish something.' And therefore, when the deal goes down, all this talk about rules, we make them up as we go along." Obama trudges ahead on a socialist agenda designed to not only destroy the middle class (as he refers to it), but to totally transform the United States of America into something that it has never been and something most of its citizenry have never wanted. America’s citizens feel stymied by Obama’s indifference to their desires and, apparently, to the law. They understandably feel there is little that they can do about Obama and his budget proposals. At the same time, there is much that the Congress can and should do. The question is—will they?
My gut tells me that we are about face another monumental moment in history that will be every bit as significant as that moment when the 2014 Congress rushed ahead with Obama’s spending omnibus. We will now see a Republican-dominated Congress face off with Obama on his proposed budget. We will see if Mr. Boehner and Mr. McConnell have the spine to do their jobs or if they will run from the austerity label which Obama has already thrown on the table. Both live so much in fear of their political existence that they are paralyzed when it comes to explaining to the American people why fiscal responsibility is the priority of the day. My money says they will cave in to Obama’s demands yet again, and throw the America people under the bus once more.
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