Our government’s spending is very much out of control. To date our National debt is well over $8 trillion dollars. Our government continues to spend away our future and the future of our children and grandchildren, They have borrowed heavily from other government programs such as Social Security and various other federal trust funds without a hint of how it will ever be paid back.
President Obama has felt the pressure and is speaking to a commission that was formed to discover and investigate ways to help reduce the deficit. Over the next ten years the deficit of our country is expected to balloon to well over $20 trillion dollars with no real relief or ideas to reduce it currently in site. The future looks quite bleak. Foreign investors may soon be demanding higher interest rates to America to keep funding this debt. The US is borrowing more and more just to keep up with interest payments. If interest rates were to spike suddenly it could cause our economy, which is just starting to show small signs of life, to spiral downward.
In order to keep the debt under control, some form of spending cuts, spending freezes and the unspeakable tax increases will be necessary. Should we, as Americans, be worried? I for one think so and I think we should make our voice be heard in the next elections. So many political officials (I call them this because they are not really representing the true wants of their constituents) are more concerned about getting their votes and they can not make the hard decisions that are really a necessity due to the large amount of debt that our government carries. Unfortunately, we as American are going to have to bite the bullet on this issue.
Newsweek last week made a bold statement saying “America’s Back!” Unfortunately this is quite a misstatement and an untruth to the American people. With the great debt, sluggish improvement to the unemployment rate, continued increases in foreclosures and a lack of true job creations by private industry, many Americans are still suffering through this economic downturn. We are seeing some slight improvement in some areas of retail sales, but it has not been enough to spurn the job creation necessary for our economy to really begin to grow. Something needs to be done and we need to get it going quickly.
Years ago I sat on a board of directors of a Homeowners Association. We had some serious financial issues facing us due to years of mismanagement Management and past boards doing and voting for things only because they look popular and kept those people on the board. They had borrowed heavily from their reserve fund to cover cost overruns from year to year, they had multiple repair projects that were due to be started, maintenance projects were needed around the property and utility rates had increased and were not planned for in the budget. For the previous 6 or 7 years, the condo fee had either been reduced or not increased while during this time they were operating at a loss and only survived because a reserve fund for capital improvements was established years before they came on board – they borrowed to pay for all the losses from year to year. Many thought this was great – no condo fee increases – less money out of their pockets, so they thought. After I came on board and was made the treasurer, I met with the accountant, I did not have the real knowledge to see everything that was going on but had sat and chaired several oversight committees and saw many discrepancies. The accountant explained to me the issues and the fines we faced if we did not put a plan together for the next few years to repay the reserve fund money that was borrowed to pay off losses. There are laws that regulated these set aside funds and something had to be done. I worked with the accountant and presented a plan to the rest of the board to get us back on the right track. We implemented an 8% condo fee increase for the next year and 5% for the following year, at the same time we put together a realistic budget with cost savings and a repayment plan. We cut our trash contract by thousands of dollars and reduced staff. We also put in place a plan to increase the condo fee consistent with the inflation rate and allowed for no borrowing from the reserve fund. At first it was an unpopular decision but eventually after we explained what was going on, it became more acceptable. I was told I would not be reelected to the board due to this, but remarkably I was elected by quite a wide margin. Over the next few years the reserve fund was repaid and we were no longer operating at a loss. When I left and a new board was in place, they adopted the same formula we came up with.
America, we need to do the same thing here. Our government has borrowed heavily from our reserve funds (Social Security and other programs) and this all has to be repaid. This is a reserve for our future and the future of our children. In the short term it will seem painful, but if we act now and get things going, in 5 to 10 years we will be back to respectability around the world and show them why we are leaders. We need to dictate to our government – and it is our government – that this is what we want. We need to look at various ways to cut costs, maintain services, reduce spending on entitlement programs and reign in our government officials. As painful as people may think this sounds, we also need to look at various ways to generate additional money to pay down the debt by increase some taxes. This money should be specifically earmarked to pay down the national debt. We can look at increasing taxes on gasoline by a modest amount – maybe .02 - .03 per gallon. Oil companies say this will increase their costs – I don’t really get that one, it is a tax that Americans will pay at the pump that is specifically earmarked to reduce the deficit. It is not taxing them in the least – wouldn’t that be a shame. This would be a fair tax across the board because all Americans who drive would pay it. We can look at a 2% increase on income taxes to all those who make over $250,000 per year for a period of at least 5 years and at the same time look at cutting taxes on the less wealthy – those with a family of 4 or more making less than $70,000 per year. We should also look at reducing or cutting aid to foreign countries for the next 5 years – why are we borrowing money to give aid to other countries? Federal government hiring should be frozen for the next 3 years and tax breaks to some larger corporations should be reviewed and cut back. To get us back on track, we all need to work together; we all need to chip in some way at least for the short term. If we all work together as a nation we can and will accomplish this enormous feat. We need to realize how serious a situation our country is in.
Obama continues to remind us that he inherited this. He did inherit some of it, but he has helped to greatly contribute to it also by his administration’s continued spending and corporate takeovers. He has failed to stimulate job creations mainly because he has failed to face the answer on how to recover from this recession. In order for us to start to see real growth, new jobs and reduced unemployment, Americans need to feel good about themselves and about their futures. Americans need to feel comfortable about spending again in order to get the economy moving at a healthy pace. Once this happens, companies will start spending again, they will start creating new jobs and increase hiring. Let’s all face it, there is no easy solutions to all of this and we will all need to pull together to work this one out. We need to elect the right people, not vote along party lines – research and vote for the person that understands what is going on, someone that will stand up for you and help get this country back to greatness. This country was built upon the backs of our hardworking forefathers, all working together, doing their part – let’s not forget that! – my explosion of thought!
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