Key Facts For This Story:
- The federal government collected a record of $736 billion in individual income taxes over the last six months. The previous record was set during the same period last year.
- Social Security and payroll tax revenues were down slightly from the same six-month period last year, and corporate income taxes were almost $24 billion less than the first half of the last fiscal year.
- Despite a record in income tax collection, and $1.497 trillion in revenue, the government spent $2.096 trillion, and ran a deficit of $599 billion. This deficit is $60 billion higher from the same period last fiscal year.
- The national debt recently hit $21 trillion, which is up from $3.9 trillion shortly before the 1992 election – or an increase of $17 trillion in 16 years.
- President Trump, and Democrats and Republicans from the House and Senate agreed to a “debt-limit suspension” that allows unlimited borrowing through March 1, 2019.
Democrats and Republicans are compulsive spenders.
There is no more argument. The facts are clear: The Democrats and Republicans are engaged in compulsive, out of control spending, with no capacity on their own to stop.
Their spending has placed them on course to bankrupt the government (Social Security and Medicare are projected to go bankrupt in 10 to 15 years) – causing substantial disruptions to all our vital services, as well as our nation’s defense over the course of the next two decades.
If you had hope that the Republicans would ever make good on commitments to cut spending, and set better budget priorities – you need only look at the 2,232-page $1.3 trillion omnibus spending bill that was passed this year that increased spending, and made no significant reforms of existing government programs.
Balancing the budget has been another popular campaign promise from Republicans. And yet, the omnibus spending and tax reform bills are positioning the government to run deficits starting in 2020 that will be in the trillions – not billions.
At the time this article is being written, we are half-way into the government’s fiscal year, and we are already nearly at a $600 billion deficit (FYI: it’s $599 billion).
If you think that maybe the Democrats will offer something different than more spending, just remember that Senate Minority Leader, Chuck Schumer (D – New York), said this following passing the omnibus spending bill:
“This spending agreement brings the era of austerity to an unceremonious end.” – Charles Schumer (D-NY)
Era of austerity?
Fiscal austerity is when you reduce spending.
Over the last 10 years, the average budget deficit (overseen by Democratic and Republican congresses) has been over $850 billion.
If Schumer and the Democrats believe running deficits of $850 billion is being frugal, or austere, or the same as “reducing spending”… Can you imagine what he and other Democrats want to spend if they get power?
Every year it takes all the tax revenue from more and more states to just pay interest on our debt.
Right now, all the tax revenue collected from 24 states and the District of Columbia go to just paying the interest on the national debt.
With interest rates set to rise, and spending and borrowing set to rise, it will take all the tax revenue collected from 30 states to cover the interest on the national debt in just 2 years.
By 2022, it could take all the tax revenue from 33 to 34 states.
And by 2025, all the tax revenue from at least 40 of all 50 states will go ONLY to paying the INTEREST on the national debt. That is only 7 years from today, and the clock is ticking.
Remember: Interest payments do not build schools, hospitals, provide clean water, or care for the poor or elderly. It’s money that could have been used to invest in America, but now is not available. Instead, it goes to our creditors – like China.
When you consider that the Social Security trust will begin to pay out more in benefits than it generates in revenue starting in 2022, and then exhaust its asset reserves by 2034, the dire situation created by high budget deficits and a rising national debt should have already produced a wake-up call for Democrats and Republicans.
Unfortunately, their policy decisions have only made the problem worse.
How did the situation get out of control?
How has the budget and spending situation of our government gotten so out of control?
In the early 1990s, the debt and deficit were central issues to the independent campaign of Ross Perot. Using charts, and carefully researched data, Perot was able to show Americans the fundamental problems with running high deficits and growing the national debt. His concern was that if the debt grew too large, our ability to address important domestic needs and provide for the national security of the country would be greatly diminished or eliminated.
The other data that Perot shared showed that if the country had been balancing its budget over preceding years, the government would have saved hundreds of billions to spend on key investments, and more importantly, the wealth of the average American would be thousands of dollars greater.
When Perot won close to 20% of the vote in the 1992 election, and the independent movement gained momentum, Democrats and Republicans were concerned about losing to a potential third party. By the mid-1990s, United We Stand had been created, then the Reform Party. Therefore, instead of arguing – politicians in the two parties compromised and made agreements on taxes, welfare reform, crime reform, an assault weapons ban, and more.
They also did something that unless you lived through it – you might not believe it really happened: Democrats and Republicans balanced the federal budget.
Balancing the budget helped strengthen the US economy, and led to a period of higher wages and higher personal wealth.
Unfortunately, the days of fiscal stability and a third party threat did not last.
In addition to balancing the budget, Democrats and Republicans also implemented policies that favored large corporations over small to mid-sized businesses, and new business creation. Manufacturing also continued to take a hit.
The government’s policies emphasized increasing consumer spending, which increased corporate profits, but also pushed all the wealth gains Americans had made in a few years into credit card, college, and mortgage debt. Democrats and Republicans lifted policies that encouraged savings in exchange for greater consumerism.
In the time shortly before the recession of 2001, most “wealth” had now taken the form of debt. Following the Great Recession of 2008, share of wealth for the bottom 90 percent of Americans, which had been at 35% in the mid 1980s, was now down to single digits – and at the level it was in the 1940s.
During the boom years of the mid to late 1990s, Americans had some of their highest approval of the two-party system. The economy was growing. Wages were high, and opportunity and optimism were high. Legislation was getting passed, and while there were political disagreements – the two parties continued to implement new programs and find ways to compromise. As a result, the threat of a third party began to dissipate for the Democrats and Republicans.
The more the threat of losing elections disappeared, so too did the focus on keeping spending in-line with revenues, and maintain budget priorities.
By 2002, deficits started to grow into the hundreds of billions of dollars, and the debt began to accelerate.
We now know that the ONLY wasted vote is a vote for a Democrat or Republican.
It is not difficult to understand why Democrats and Republicans no longer plan or manage the government responsibly: they have no incentive.
Both parties know that if they are the only game in town, your choices are limited.
Success actually has become the enemy of the political elite. With more intense political divides, politicians know that it is in their best interest to not accomplish too much. Outstanding issues become weapons to use for fundraising and campaign messaging. And instead of taking responsibility for a failure to compromise, politicians resort to blaming the opposition, saying, “If only we had more [Insert Party Name] in Congress! Unfortunately, the [Insert Opposition Party Name] are preventing us from getting things done.”
In short, the political monopoly has given the American taxpayers a government that no longer answers to them.
Now, our elections have become very similar to when we played volleyball in gym class. Every 4 years, someone yells, “Rotate!” and all the same players move around to different places – only to return in short time to where they were before – as the country changes leadership.
By now, however, the evidence that Congress is bankrupting the country and robbing our children of their future, is clear and indisputable.
Spending by Democrats and Republicans has pushed us to the edges of an economic cliff.
If action is not taken soon, we are going to reach a point where powerful buyers of U.S. government-issued debt are going to be able to influence or manipulate our policies and economy.
We already had a situation during the Obama administration where Secretary of State Clinton traveled to China to plead with the Chinese government to buy more U.S. debt. Her promise was that the budget would return to normal once the Chinese helped finance early Obama administration spending, which run multiple trillion-dollar deficits. That return to normal never took place.
We also will reach a point where we have no money to make investments in infrastructure, healthcare, and defense.
The truth is – we need to stop believing the perpetual lie that votes for independent candidates are wasted votes. We are all witnesses to the truth that neither the Democrats nor the Republicans can be trusted to lead this country and end the compulsive spending.
To protect the future of our children, and their children, we must stop the out-of-control spending. We must stop the Democrats and Republicans.