It’s early 2013 and the “fiscal cliff” has been avoided. Too, the debt-ceiling debate, scheduled to be renewed in January, didn’t amount to more than a formality before Republicans gave Obama all the money he desires — at least until May, anyway. Score victories for Obama.
But it should be asked in the wake of the “successful” fiscal-cliff negotiations, “Why does the U.S. debt ceiling need to be raised again; why, during fiscal-cliff negotiations, didn’t Congress simply raise taxes to pay for all planned spending?”
The answer is simple: Then Americans would get a good sense of the immense amount the government is spending in their names — on their credit cards. According to liberal Boston University economics professor Laurence Kotlikoff, to pay for all the U.S. government’s planned spending, all federal taxes must rise immediately by 64%. And you thought a 2% rise in Social Security payments this year hurt you?
Kotlikoff deduced that the U.S. government owes $222 trillion in future bills, an amount that increased by $11 trillion last year alone because we aren’t saving for future obligations, such as Social Security, Medicare, Medicaid, etc.
To those readers who have been led to believe that all of the country’s financial problems could be solved merely by making the rich “pay their fair share,” let me point out how far from the truth that is.
As David Burge pointed out on his Iowahawk blog, if government attempted to pay for our country’s 2011 budget of $3.7 trillion by taking every penny of the Fortune 500 companies’ 2010 global profits ($391 billion); every penny of all major league sports’ salaries, along with NASCAR and PGA salaries ($9.4 billion); every penny made in every household above $250,000 ($1.43 trillion); we stop all warmaking ($264 billion); and eliminate foreign aid ($50 billion); it would fall short ($3.556 trillion).
What does this debt mean to us? Right now, it mainly means items cost more. As the money supply is enlarged — created out of thin air — to pay the U.S. debt, each dollar in existence purchases fewer goods. It’s a process known as inflation.
Click here to read the entire article.