The ‘national debt’ of .4 trillion is simply the accumulated amount of money our federal government spends more than it collects. It isn’t based on a budget as a 1921 law requires the President to present an annual budget to Congress and a 1974 statute requires Congress to approve it. In spite of outstanding requirements, the last budget that received congressional approval was in April of 2009. The President’s budget proposal submitted for 2012 was unanimously rejected by the House (414-0) and Senate (99-0).
The REAL national debt amounts to $122 trillion, that’s 122 thousand billion dollars. A lot of us don’t make that much in a whole year! Government statisticians, actuaries and computer specialists know how long we are going to live (collectively) and all the other vital statistics about births, immigration (in and out) and deaths. Using this information, government sources assert that unfunded liabilities amount to $16 trillion for Social Security, $21 trillion for the prescription drug program and another $85 trillion is going to eventually come due and payable for Medicare. All that adds up to the $122 trillion as cited above. The facts are that each taxpayer is on the hook for more than a million bucks and each citizen of all ages will have to come up with about $387,000. Impossible? Reasonable people would respond with a resounding YES!
Perhaps these astounding numbers make the reported ‘national debt’ of just $16.4 trillion look miniscule. Taxes for everyone will go up, especially for millionaires and billionaires. Well, that is if you are not connected with ‘crony capitalism’. For example, NASCAR racetracks receive tax benefits amounting to $78 million, American Samoa receives $62 million and distillers get a $222 million tax rebate. It might be worthwhile to mention that Star-Kist employs most of the Samoan workforce and Paul Pelosi (Nancy’s Hubby) owns $17 million of Star-Kist stock. Another little sidelight is that American Samoa is suing the USA to receive full citizenship for all 55,000+ residents of this territory (think benefits).
Chris Dodd, retired Connecticut Senator and now Chairman and CEO of the Motion Picture Association of America (MPAA, a Washington lobbying group) just negotiated a two year package deal for the movie industry to allow them to avoid taxes on the first $15 to $20 million of production costs made in the USA. Nice deal; connections count!
As mentioned, federal taxes are increasing for everyone in the ‘middle class’ and most corporations. Payroll taxes will increase from 10.4% to 12.4%. If you make $40,000 per year, you will pay about $800 more in taxes. Keep in mind that each year, our US dollar loses from 2% to 4% in value, thus your reduced purchasing power for 2013 will be a total of about $2,000. Considering their increased taxes, there is a good chance that many employers will be unable to offset that loss with increased payroll for their workers.
Millions of people throughout the world have watched the political altercations unfold over the past many months. The wrangling continues everlasting. What happened to forestall the ‘Fiscal Cliff’ are higher taxes for everyone employed and continued benefits, probably increasing, for all those that don’t have jobs for any reason.
The final agreement between Congress and the President allowed for $15 billion of spending cuts and $620 billion in NEW taxes, or 41 to 1 in favor of taxes. In two months, our Washington politicians must (absolutely) agree on a ‘national debt’ limit. If these negotiations cannot ignite spending cuts greater than revenues, the USA will be on the downhill ramp toward the welfare state with sovereign debt and deficits beyond comprehension.
– Dick Baynton
