After all the furor in the last week about raising the debt ceiling, lets get some numbers straight before I tell you about my visit to the Mc Kaskill Kitchen Table Talk meeting in my home town.
14 trillion in debt now
2.4 trillion added by new debt ceiling
10 trillion added to debt over next 10 years due to base line budgeting
26.4 trillion total debt in 10 years
-2.1 trillion negotiated cuts over next 10 years
24.3 trillion is the projected total debt in 10 years according to this new debt ceiling deal.
Senator Mc Kaskill must be a very busy person. I thought at first she would be there so I was disappointed to find out it was just a staffer there to run the meeting.
There were about 12 people in attendance. I was the youngest person there (I'm 47) by at least 20 years for the first half of the meeting. Then a man that looked younger than I arrived late.
The staff person went around the room to ask if anyone had concerns. I was encouraged when the first person began complaining about the debt ceiling deal. But I'm afraid my jaw dropped when the complaint was fully stated. She was angry that the republicans got everything they wanted and Obama was just letting everyone have whatever they wanted and he just went along. "He has to stand for something at some point," she said disgusted. She knew that Senator Mc Kaskill and the president were close allies so could she please hold the president to account? The staffer said he would make her aware of this concern.
The next person wanted to know why the people who are making more money than they need are allowed to get social security. Why couldn't the cap be put in place to keep the rich from drawing social security when the don't need it?
Then the third person (who I think was the spouse of the second person) made a good point I thought about social security. He wanted to know "Why the $@&% do they call social security an entitlement? I've paid into it all my life. That's my money I paid in." The small group liked this. I thought he pretty well answered his wife's question myself.
The next guy was a hoot. He was a story teller I could tell. He started by complaining about all these adds against Claire Mc Kaskill and no one has answered them. With dramatic flare he asked, "You know where all the money for these adds is coming from don't you? Texas! There are groups out of Texas funding this add campaign." Then dramatically, like a lawyer pressing the jury to convict, he announced, "And Carl Rove is the one organizing them." He looked around the room to see the looks of horror on the faces of those present. He then went into a lecture on how the rich need to pay more taxes because they can afford it. The president should raise taxes on these people to help pay the deficit. I began to feel a little overwhelmed at the magnitude of the challenge to help people like this understand how big a problem we are facing. ( http://www.youtube.com/watch?v=JY8LKII_MNA ) The story teller then swerved into the fact that the first trillion dollar deficit, "was run by none other than..." pausing for dramatic effect... "Ronald Reagan!" he exclaimed dramatically. To the staffer's credit he interrupted the mini-lecture to move the meeting along.
Summarizing the rest...One was concerned about veteran's benefits. Another voiced concern over the small arms treaty Hillary Clinton was involved with (which I still know nothing of and neither did the staffer.) The person that came after me wanted to know how the debt ceiling deal would affect the state of Missouri. (The staffer said this was not understood until the cuts were determined.)
For my turn I presented the above numbers and ask the staffer if Senator Mc Kaskill was involved with or knew of any plan to get our debt problem under control. He said in essence, other that the cuts that were agreed upon in the debt ceiling deal he knew of no other plan for cuts.
I explained to the best of of my ability that the debt problem will make all the other concerns everyone in the room had, pale in comparison. The destruction of the dollar would make pension and social security checks worthless. We DO NOT HAVE A REVENUE PROBLEM! WE HAVE A SPENDING PROBLEM. (I directed this statement toward the story teller. To his credit he nodded in agreement. ) Raising taxes would only discourage the very thing we need, economic growth. The staffer assured me he would make Senator Mc Kaskill aware of my concern.
There you have it. Don't get your knickers in a knot. It's all under control friends. No worries.
Thank you for going to this and speaking, Whitehawk.
ReplyDeleteThe middle part is great. There are factual errors at the beginning and end. The debt ceiling increase added nothing to the debt. That train left the station when congress spent the money years ago. Not paying your credit card does not decrease your debt. No, it massively increases your debt, without increasing your assets. So, your statement "2.4 trillion added by new debt ceiling" is false.
ReplyDeleteThen the statement "We DO NOT HAVE A REVENUE PROBLEM! WE HAVE A SPENDING PROBLEM." is also false. We are at a very low revenue as a percent of GDP. The reason Reagan ran the first $Trillion debt was decreased taxes. Governments must tax to spend. If they don't spend, they don't operate, then they are useless and we have a state of anarchy. Gov't must grow to match the size of both the population and sophistication of its society.
We have a revenue problem now, because of years of not having enough revenue. Instead of having just a slightly higher tax rate over decades, we now need a much higher tax rate over a few years to burn off the massive debt we have incurred from a failed policy made up thirty years ago.
From Whitehawk
ReplyDelete@ Ashtonmoderation. I’m not sure what you mean by this comment. Please clarify.
**“The debt ceiling increase added nothing to the debt. That train left the station when congress spent the money years ago. Not paying your credit card does not decrease your debt. No, it massively increases your debt, without increasing your assets. So, your statement "2.4 trillion added by new debt ceiling" is false.”
I understand what you mean that raising the debt ceiling didn’t add anything to the debt. My point was to show what the projected debt will be in 10 years without any intervention. If I didn’t make that clear, you have my apologies. I’m not sure what you mean about the train leaving the station when congress spent the money years ago. Borrowing is on-going and will almost certainly reach the new ceiling in record time judging from the record of this administration. I am checking my numbers but last I heard we were spending 175% of our revenues. The 75% over our revenues is being borrowed. You can call it a revenue problem if you want to but when you look at the spending chart I have marked you will have to agree spending is the issue.
http://www.heritage.org/budgetchartbook/growth-federal-spending-revenue
**“The reason Reagan ran the first $Trillion debt was decreased taxes.”
It is a common misconception that reducing tax rates results in lower revenues. This is absolutely not the case. Whenever you decrease the cost of doing business, more people, well… do business, resulting in increased revenues. Under Presidents Coolidge, Kennedy, Reagan and George W. Bush tax rates were lowered and resulted in increased revenue. The problem in each case was that as revenue increased so did spending. It is primarily a spending problem.
http://www.heritage.org/research/reports/2007/01/ten-myths-about-the-bush-tax-cuts
http://www.baltimoresun.com/news/opinion/readersrespond/bs-ed-taxing-rich-letter-20110803,0,5852248.story
The current drop in revenues is not due to lower tax rates but an increase in the cost of business via increased regulation. (And hense less business is being done.) Businesses are also very reluctant to get more involved in this economy (by hiring more people) due to fears of increased cost associated with health care reform. Whether those fears are well founded or not remains to be seen. The bill had to be passed so we could see what was in it, remember. The threat of higher taxes looms with the current administration too. When you increase the cost of an activity (by taxes in this case) you can expect people to do less of it.
**”Gov't must grow to match the size of both the population and sophistication of its society.
We have a revenue problem now, because of years of not having enough revenue.”
As the population grows so does the revenue even when the rate remains the same. The idea that tax rates must forever be raised is dangerous to freedom. At what rate do they stop getting raised? 75%, 95%... As for matching the sophistication of the society who gets to decide how “sophisticated” we are? If that sophistication requires one to give 75% of their income to pay for this sophistication we become slaves to this nebulous concept defined by ?????