"If interest rates were to return to the average for the years 1990–2010 (5.7%), debt service alone could be sucking up just shy of a trillion bucks per annum within half a decade."
That quote just about sums it up, doesn't it? Last year, debt service costs for the federal government were $185 billion dollars. Return interest rates to near historic levels, and we're looking at an increase in the federal budget of around three quarters of a trillion dollars.
I remember my college economics teacher telling a classroom full of farm kids that we didn't need to worry about government borrowing, that it really didn't become a problem until debt service costs got too expensive. Well, we've done it. We've reached a level of debt service costs that would surely concern even the Keynesians who taught me the little bit of economics that I remember.
President Obama's solution is to raise taxes on those making over $250,000 per year. As I remember, that would raise about $100 billion a year. Leaving the economic merits of that idea alone, it won't even cover the cost to the federal government of a one percent increase in interest rates.
That's not a solution. It's barely a start to a solution. Cut farm programs? That savings would disappear with a two tenths of one percent increase in interest rates. We're in a crisis, one that can only be solved, according to estimates I've seen, by an immediate and continuing 80% increase in the taxes we pay now.
Or, we can cut government spending. Cut it by an amount that we can't even begin to imagine. Cut medical programs, programs for the elderly, defense spending, foreign aid, and yes, even Social Security.
We should do this because it is the right thing to do. Because we have government that is larger than the government we're willing to pay for. We should cut spending because a smaller government will make us a better people - more self sufficient, tougher, more self reliant and self confident.
The worst thing about the system we have now is the disappearance of the America we used to know. One where people solved their own problems, where if they couldn't solve their own problems, they looked to their neighbors, their churches, their local governments and local charities.
80% of Americans oppose cutting Medicare. That, to me, is the most depressing news I've heard in this most depressing season. Eight out of ten people either think we can solve our problem without cutting the fastest growing part of the federal budget, or think we don't have a problem at all.
We can argue about how to slow the spending in Medicare, but we can't ignore this fact: the growth in government spending is unsustainable. We're going to have to cut everything. Absolutely everything. And even if we couple those cuts with an increase in tax revenue, we're still going to be one small hiccup in the economy, one foreign policy problem or natural disaster from an economic catastrophe.
We've mortgaged our future, our children's future, and put at risk the future of our country. It's time to fix our problems