US Government Borrowing $4.8 billion Per Day

As some conservative blogs have been pointing out, what is not sustainable cannot continue forever.

(CNSNews.com) – The federal government ran a deficit of $292 billion for the first two months of fiscal year 2013 – October and November 2012 – amounting to $4.8 billion of borrowed money each day. “The federal budget deficit was $292 billion for the first two months of fiscal year 2013, $57 billion more than the shortfall recorded in October and November of last year,” CBO said in its Monthly Budget Review Friday. - CNSNews.com

That comes out the the US borrowing $160 a day per American (at 300 million Americans) or $640 a day for a family of 4 including weekends. so for each week, the Government is borrowing $4,480. At this rate, the US Government will borrow over $58,000 per American in 2013 which totals over $230,000 for a family of four. Keep in mind, this is not what they plan on spending per American, that total is much great. This is only what they have to borrow because tax revenue is not enough to pay for all their spending. 

Just one more example of why this is s spending problem not a revenue problem. After all, how can you possibly keep up this level of spending when the Government is spending more per person that 98% of the population earns

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Howard Dean: "The Truth Is Everybody Needs To Pay More Taxes, Not Just The Rich"

I have said it before, the rich do not have enough money to pay for all the Democrats spending demands. At least one prominent Democrat is willing to admit this:

The only problem is -- and this is initially going to seem like heresy from a progressive is -- the truth is everybody needs to pay more taxes, not just the rich. And it's a good start. But we're not going to get out of this deficit problem unless we raise taxes across the board, to go back to what Bill Clinton had and his taxes. And if we don't do that, the problem is the pressure is going to be on spending even more. - Real Clear Politics

Click the link and watch the interview. Howard Dean admits that the country would actually be better off if we go over the 'financial cliff' and return to the Clinton era tax rates for everybody, because that is how you really increase Government tax revenue.

Increasing taxes on the rich only solves 8% of the deficit problem. President Obama and the Democrats are silent about the other 92% of the solution because they have no intention of solving the problem.

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Obama to Republicans - Eliminate the Debt Limit Now, Spending Cuts Later, Maybe

In an earlier post I covered Treasury Secretary Timothy Geithner's proposal/demand that Congress simply eliminate the debt limit.

Treasury Secretary Timothy Geithner said the U.S. “absolutely” should get rid of the debt ceiling as soon as possible.

“It would have been time a long time ago to eliminate it,” Geithner told Bloomberg TV on Friday. “The sooner the better.” - HuffPo (Found at Hot Air)

As it turns out, this is the demand that was made today to the Republican members of Congress as part of the fiscal cliff solution talks.

House Republicans said on Thursday that Treasury Secretary Timothy F. Geithner presented the House speaker, John A. Boehner, a detailed proposal to avert the year-end fiscal crisis with $1.6 trillion in tax increases over 10 years, an immediate new round of stimulus spending, home mortgage refinancing and a permanent end to Congressional control over statutory borrowing limits. - NY Times

The 'deal' includes no cuts to Government spending. Only a suggestion to discuss cuts sometime next year. The offer is so ridiculous that Republican Senator Mitch McConnell burst into laughter. Unfortunately, this meeting confirms my belief that the Democrats have no intention of dealing with the Nation's debt problem.

Geithner’s visit to his office left McConnell discouraged about reaching a “balanced” deal on tax hikes and spending reductions designed to prevent a shock to the economy in January. “Nothing good is happening” in the negotiations, McConnell says, because of Obama’s insistence on tax rate hikes for the wealthy but unwillingness to embrace serious spending cuts. - Weekly Standard

So there you have it, Obama and the Democrats are unwilling to commit to any real spending cuts, outside of cutting spending for the Military. They have already run the country for four years with no budget. Now they are demanding to be able to run the country with no limit on spending.

Like I said before, they have no intention of solving the debt and deficit crisis. If they did, they would know how high the debt would grow before a plan of increased revenue and decreased spending would eliminate the deficit. Of course they might have even more plans for increasing spending. Perhaps legalizing the illegal aliens and giving them Obamacare benefits. That would surely increase Government spending.

Keep in mind that raising taxes on the richest 2% will only solve about 8% of the deficit problem.  This demand is confirmation that President Obama and the Democrats have no intention of solving the debt problem. 

They plan to run up the debt as far as it can go.

 

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Senator Dick Durbin (D-IL) Lies: 'Social Security does not add one penny to the debt. Not one penny.'

So the latest story concerning the fiscal cliff the US is facing is news that some Republicans in Congress are thinking of being flexible when it comes to their 'Grover Norquist' no tax increase pledge. However, I think this issue brought out a huge lie pushed by Democrats in general but said by Illinois Democrat Senator Dick Durbin. He said that

 'Social Security does not add one penny to the debt. Not one penny.' 

His statement was in response to Republican demands that entitlement spending reform be on the table . Basically Senator Durbin is claiming that there is no need to reform Social Security Entitlements because Social Security is not a part of this nation's spending/deficit crisis. Unfortunately, this is not the case and Senator Durbin for sure knows that this is a lie. Zero Hedge explains:

This statement is a lie that is covered over by a dopy accounting system called the Unified Budget. In this magical world, the deficits driven by entitlements are hidden. The reliance on this accounting fiction is a dangerous path for liberals to take. The fact is, SS (and the other government retirement programs for Federal workers and the Military) are running billion dollar cash deficits today and will run Mega-Trillion dollar cash deficits for the next seventy-five years. Every penny of those deficits will result in more borrowing from the public.

These deficits may be “Off Budget” in the magical world of Unified Accounting, but they do add to the publicly held debt on a dollar-for-dollar basis. The Rating Agencies are part of the Cliff discussion (like it or not); those folks are no dopes and they fully understand that Senator Durbin is all wet with his talk of Off Balance sheet debt. - Zero Hedge

If a publicly traded company did this sort of accounting gimmickry, shareholders would eventually lose their investments and people would go to jail. Ironically, Democrat politicians would then be crowing to every TV camera how we need even more laws to prevent this kind of criminal behavior, all the time committing a much larger theft right out in the open.

Worse, the Social Security Trustee report notes that Social Security will run out of money around 2033, unless Social Security taxes are raised (or benefit rules reformed).

Finally, the Trillions of dollars in assets that the Social Security Trust fund has are currently held in the form of US Treasury Bonds. In short, the money was given to the Government and spent. The Government will then have to redeem the bonds as the money is needed to pay Social Security recipients. This means that they will have to get the money from somewhere. Given that the Government plans to run a deficit into the sunset, that means that they will either have to print or borrow the money.

Graphs pictured above were taken from the US Government's own Government Accountability Office. The article is titled 'Federal Debt Basics'. Clearly, this is a topic Senator Durbin and many of his follow Democrats would fail if a grade was given. Unfortunately, it is we who suffer as a result of their incompetence and criminal behavior if they had to be judged the same way that they demand businesses be held to account.

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So What Does Obama Plan To Use Gov't Revenue On If the Dept Limit Is Not Raised?

President Obama and his team have been making a number of threats during the discussion on how or whether to raise the US debt limit. These threats included defaulting on debt payments as well as not paying out Social Security benefits.

Now given that Government Revenue (taxes and fees that the Government is receiving each month) exceeds the amount needed to pay for Social Security, Medicaid, Defense and debt obligations, just what does he plan to use that money for if he is not going to use it to pay these items?

Also, it is nice to see questions regarding the $2+ trillion Social Security Trust Fund. As I pointed out last year:

So on the one hand, Social Security has a surplus of over $2 Trillion to meet it's needs. On the other hand, all of that money was traded for Government bonds. The bonds are a promise from the Government to repay Social Security.

The Government took the money and spent it. The Government now either needs to pay that money back to Social Security, and with running a deficit, would need to borrow that money to repay the bonds. That could be a serious problem given that the Government already needs to borrow to cover the current year's spending deficits. And that is a problem with the idea of selling the bonds held by Social Security. Doing so increases the amount that needs to be sold into the market, and the Government is already having trouble selling the bonds it needs to need to cover current-year deficit spending.

Of course they could just print more money. I am not sure exactly how that would work out.

So remember, no matter how the politicians try to claim that Social Security has no problem, keep in mind that these same politicians turned the Social Security Trust Fund of $2 Trillion and turned it into added Government debt. - Link

Once the debt issue is over, the Conservatives in Congress should go back and tackle Social Security reform. The defense that there is no problem was just busted by the Democrats.

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Ignoring the Debt Ceiling vs Passing a Budget

News reports are suggesting that President Obama and his Democrat allies in Congress are setting the stage for the possibility of simply ignoring the country's debt limit by declaring it unconstitutional. This option does not seem so far fetched given the lack of action from the White House to come to some sort of deal in getting the debt limit raised, as well as White House recognition of the simple fact that even substantial tax increases would not be able to effect the massive spending deficit that the Government is committing itself to pay. Regardless of the issue that Republicans are refusing to consider any tax increases. Even if Republicans would be willing to raise taxes, President Obama would only be able to raise taxes on the highest earners, and not on the middle class where the most tax revenue could be collected.

So, in comes the possibility of an end run around Congress to keep the spending going regardless of any debt limit. It is an interesting solution and if done just might help push the US into bankruptcy that much faster.

But Congress does have a weapon to fight against this. Next year's budget. There are a couple options here, from refusing to pass a budget, prompting a Government shutdown, or passing a budget that only spends incoming revenue. Another option would be to pass a budget (Or better yet only propose a budget) that takes into account all spending needs and proposes across-the-board tax increases so that Americans are made aware of the actual bill for the Government services that they are demanding. At a minimum, Congress needs to start speaking up against the Democrat's proposed option of trashing the debt limit.

One more thought. A good portion of our upcoming debt increase and deficit problems are related to promises made to seniors by the politicians that they elected. These politicians failed to tax and save for these seniors. Instead, these seniors and politicians are planning to stick us children and grandchildren with the bill. So I am starting to come to the opinion that part of the solution is to break the promises made to these seniors. The promises that were made to them were in exchange for their votes. In reality, they were little more than lies. Their votes were in effect in exchange for lies. Worse, the money that should have been saved to fulfill these promises were instead stolen by these same politicians to make even more promises. So I think it is time to take a second look at what was promised and what we can afford to keep.

The Democrats will portray this as pushing grandma off the a cliff. However, there is another side to Grandma's story and it involves giving the bill to support grandma to her grandchildren and great grandchildren. That is not exactly fair. Not only that, is this what Grandma wants? I doubt it. This is why the Democrats are being dishonest in suggesting that everything can be paid for by taxing the richest a little more. This however is nowhere near enough. Future generations need to pay more. Lots more.

Now keep in mind the following when judging my comments above - Medicare is going to go bankrupt well before I can take advantage of it and Social Security is going to run out of money about the time that I will be eligible to collect from it. That is a pretty raw deal after having paid into it so far into my working life.

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Scrap the 'Tax by the Mile' Idea for Transportation - Everyone Should Pay

The idea of taxing drivers based on how much they drive keeps coming back in the news. I covered this back in April, 2009 in the post 'A (GOVERNMENT CONTROLLED) TAXI METER FOR EVERY CAR IN AMERICA!'. Now the President is pushing this idea ahead and a way to get more tax from the population.

The Obama administration has floated a transportation authorization bill that would require the study and implementation of a plan to tax automobile drivers based on how many miles they drive.

The plan is a part of the administration's "Transportation Opportunities Act," - The Hill

That's great if you want to turn every car and truck in America into a taxi earning for the Government.

Here are some additional thoughts (in addition to my original post linked above) on this subject an how funding for the building of roads and bridges should be shared between the entire population.

First, a well-developed, well-maintained public transport infrastructure is in the benefit of every American. While some use the roads every day, everyone benefits from them, including those without a car. Need a policeman, Fireman or ambulance? They can't get to you if you without a road to get them there. While the need is rare, the need in those cases is urgent if not life-threatening. So just because you do not use it everyday, it does need to be maintained regardless of your use. And imagine trying to sell your house if there was no road to get to it. Use a bike or walk on the sidewalk. This is possible only as a result of road building. If you are going to tax drivers by the mile, why not also bikers and walkers?

So with this one issue in mind, it is not fair to burden only a segment of the population with funding of this infrastructure.

Then, as i wrote before, a mileage tax on cars is like putting a Government-controlled taxi meter in every vehicle in America. Outfitting every car and truck in America with tracking devices just to collect more tax has to be one of the dumbest ideas, ever. It would also be one of the most expensive projects, simply to put in place the tracking devices to levy and collect the tax information. And of course, it is not going to be the Government that pays, but car owners.

Worse, cars are already taxed in relation to how much they drive through a tax on gasoline. Sure, the rate is different for everyone, based on how much your car consumes as well as how much city/highway driving you do. However, everyone who drives pays and there is no need to make any changes to the cars (such as adding hundreds of dollars of GPS tracking and metering equipment) as the tax is collected at the pump.

One of the complaints of the current system is that people who choose hybrid cars save money because their cars use gasoline more efficiently than people who choose gas guzzlers. But there is an easy solution to this problem. Simply get rid of the $7,500 tax credit buyers of these cars receive and use that money for road building. The Administration would never do that because this would kill off the market for these cars, despite it solving the reduced gas tax revenue problem they create. And keep in mind that this is a problem the Government created in the first place for offering the tax credit.

Also, Democrats conveniently forget one reason for having a gasoline tax was to encourage drivers to conserve gasoline. Unfortunately for the rest of us, conserving gasoline means less tax money for Congress to waste. So our reward for being 'better citizens' is more taxes. In this case a proposed tax on every mile that you drive your car.

Also, lets not forget that the driving-force for a pay-by-mile tax is that the idea of raising gasoline taxes higher is universally unpopular. So as a fix, they decide to simply invent a new tax revenue stream. By all means raise the gas tax and incur the anger of the voting public. I can't see how this alternative is going to make people less angry. Really, they are going to violate the personal property of millions of American in installing tracking devices.

In addition to scrapping the credit for hybrids and electric cars, how about also scrapping the multi-Billion Dollar ethanol gas subsidy.

Ninety organizations are calling for an end to the $6 billion-dollar-a-year subsidy that encourages the production of ethanol biofuel from maize in the United States.

Ethanol makes up about 10 percent of the gasoline fueling cars in the United States, and almost all of it is made from maize.

"It’s renewable and domestic, home-grown," says Bob Dinneen, president of the Renewable Fuels Association, who adds that this home-grown source of energy is reducing the nation's dependence on foreign oil.

A 2007 U.S. law requires motor fuel to include renewable fuels. And - for blending in ethanol - gasoline makers get a tax credit that adds up to about $6 billion this year. - VOA News

In addition to direct savings from ditching the ethanol subsidy, all drivers would benefit immediately due to better gas mileage from running on an all-gas mixture.

Worse, the money already extracted from car owners (and even residents in general) in some places is obscene. Certain Metropolitan areas subsidize their mass transit project through overcharging tolls for vehicle drivers. I just drove back from New York and the sight of a sign noting that the Toll to cross the Verazanno Bridge was $13 was shocking even with the knowledge that this is the round trip price. Still that is $6.50 for each direction. It is well understood that a good portion of that toll is destine to subsidize the subways. How much? Try half!

MTA Bridges and Tunnels (B&T) operates seven bridges and two tunnels that form essential links for vehicular highway transportation in the New York City metropolitan region. With an average daily traffic of more than 800,000 vehicles using the nine crossings and more than half of its $1.4 billion in revenue dedicated to mass transit, B&T plays a significant role in enhancing regional mobility. - MTA 2011 Final Proposed Budget (PDF Link, page 186)

Overbilling Car drivers to support the region's public transit system is only part of the redistribution that is going on in the NY City area. Take these additional taxes:

What You're Paying the MTA When You Don't Use It

• .34% payroll tax on all employers (to include school districts and local governments)
• 5% additional sales tax on car rentals
• Surcharge on drivers' licenses and car registrations
• .375% of the sales tax
• 17% surcharge on corporate taxes
• Surcharge on telephone taxes
• .3% Mortgage Recording Tax-1; .25% MRT-2 - Link

All of this in order to prevent fare hikes and cuts in service. And yet, all of these acts mask the true costs of the service of public transport. It also puts off the need to fight waste and abuse when such a large slush fund is available to cover over the difference from actual revenue (bus and train fares) from actual expenses.

So drivers are already paying. Perhaps, money already extracted from drivers should be used on roads and the place to raise additional revenue should be in raising public transit fares. They are the ones who are not paying their 'fair share'. Their share is being partially paid off the backs of car owners.

Declaring that only some benefit from a well developed road infrastructure is simply false. Also, the excuse given for requiring all Americans to have health care in ObamaCare was that all Americans will eventually need medical care. the same applies to roads. Everybody needs them. So everybody should pay.

P.S.

One real screw in this tax meter plan of Congressman Oberstar is that we are already taxed on lots of roads that we drive on. Are they going to tax us for driving through Delaware on I-95 where the tolls per mile cost more than the cost of gasoline to drive through the state? Is this little machine going to tax us for driving on our own property and on local roads and 'unimproved' roadways? And if the answer is that they will not be taxing us on all roads, why should people who do not use them have these meters installed in their cars?

And how are they going to prevent massive fraud by users disabling these machines? That might be as simple as blocking the GPS signal. It would be impractical to integrate these machines to existing cars in a way that would defeat tampering. And if they ever did manage that feat, surely people will just start not registering vehicles because they can't afford the taxes that come with it. This would be a real possibility out west where the distances to be driven are large and the possibility of an encounter with law enforcement minimal. Then again, you register your car with your state, not the Federal government. So would they expect State Authorities to enforce Federal Tax-Meter regulations?

Surely there are many more issues out there that this Congressman is not interested in hearing about.

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Note for Democrats: Spending Less is Not Extreme - Demanding More is...

It has been clear for a while that the Democrats are not interested at all in trying to win over Tea Party activists or people like myself who agree with the Tea Party goals of cutting spending and limiting Government.

Now it seems that the Democrats are taking a position of open hostility against Tea Party attempts to make out Government Representatives more responsible:

"The main thrust is basically that we want to negotiate and we want to come up with a compromise but the Tea Party is pulling Boehner too far over to the right and so far over that there is no more fruitful negotiations," Schumer said on the call. "The only way we can avoid a shutdown is for Boehner to come up with a reasonable compromise and not just listen to what the Tea Party wants. "

Schumer described Boehner as "in a box," over the budget negotiations.

The four senators came on the call after Schumer abruptly went silent and followed Schumer's script closely. - Washington Examiner

Some of our politicians simply have no shame at all. Unfortunately, this is a problem on both the left and the right. However, no amount of spin or even flat out slander of a segment of the voting population is going to change a very simple fact that the Government is recklessly borrowing huge amounts of money that they have no intention of ever paying back. And I think with this in mind, they have no problem trying to spend even more huge amounts of money, simply to buy votes. Keep in mind that the deficit for the current year is about $1.5 trillion out of a $3.5 Trillion budget. Republicans were attempting to cut budget spending by less than 2%. This is defined as extreme by Democrats. It might shock Senator Shumer, but many American families have been forced to such 'extreme' measures with their own budgets.

If Shumer wants extreme, I suggest the Republican members of Congress give it to him and the Democrat leadership. The easiest way to do this is by refusing to increase the debt limit.

Refusing to increase the debt limit will force the Government to operate under a balanced budget. Given how Democrats can't even cut frivolous and wasteful Government spending, this is probably the one way to stop this insanity. Is this an extreme way to go? the budget would have to be cut over 30% (Or cuts plus increase Government revenue). The more I listen to Congress bickering on CSPAN, the more I'm starting to think that this is the only way to go. It would be more tough love than extreme. It would surely be painted as the 'Nuclear Option', but hey, we live in a nuclear world.

At the very least, this should be the opening position for the Republicans in the House. Even if they eventually have to meet the Democrats 'half way', that will still be lots better than where we are being driven right now.

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The US is Going to Have to Take an Axe to the Budget

One thing that has become quickly clear to me while listening to all the talk inCongress of the Continuing Resolutions to fund the Government and just what to cut in terms of spending, that is it going to be impossible to 'apply a scalpel' to the US Budget and carefully cut spending. there are two problems with such a method. First, most every dollar of spending has some Congressman ready to stand up and speak against cutting it. And second, the sheer amount of overspending, around 40% of all spending is borrowed, there is no way that we will be able to get Congress to selectively cut a tiny fraction of that amount.

Ace of Spades has been covering the budget/debt problem for a while:

With just this year's spending, President Obama, Henry Reid, and Nancy Pelosi have saddled us with debt that we will probably never pay back, and the White House budget (even before the CBO corrections) agrees. It doesn't even try to pay back these deficits - in fact it doesn't even balance the budget. Ever. - Ace of Spades

I think it is time to axe the budget by starting with a new budget where each kind of spending needs to be justified with total spending limited by the amount of expected revenues.

Does this mean that I want to cut Head Start? Damn right it does. I already pay for two children of my own. It is a responsibility of parents. Shame on the Government for deciding that I should also contribute to support children of other parents.

The budget Axe. It's the new scalpel. It needs to be.
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Democrat Messaging Republican Cuts - 'Reverse Robin Hood'

So on the way home Tuesday evening I caught a couple minutes of Congress debating how to, and how not to cut Government spending. Lucky me caught Boston Congressman Stephen Lynch's attempt to redefine Republican efforts to cut spending while at the same time not raise taxes against the rich as 'Reverse Robin Hood'. You can catch his comments here (Clicking the image will take you to the CSPAN site where his comments start a couple seconds into the video):

Video Link

I have a couple major issues with his line of thinking.

FIRST, in the case of 'Robin Hood', he was stealing from the rich to give back money that was taken by the Government from the poor. In our present society, the bottom half of income earners currently pay no taxes. In effect the Government is asking/taking nothing from them in the form of contribution as part of a collective payment towards the costs of our society. So what Congressman Lynch is defining as taking from the poor, is in actuality proposals to give less to the poor. There is a huge difference.

Second, he attempts to portray Republicans as evil because he claims that Government giving to the poor could somehow continue if only the Republicans would be big enough to raise taxes on the rich or in his words to ask millionaires 'to give a little more'. This is ridiculous for a number of reasons:

• While he is saying millionaires, he then goes on to talk about raising taxes on those earning $250,000 and more. The last time I checked, that was much less than a million, unless he is inferring that people earning such amounts are already millionaires.
  
• The potential increase in Government revenue by letting the Bush tax cuts expire for the richest Americans is nowhere enough to reduce the yearly Government spending deficits. In fact the cost to extend the tax cuts for the richest for ten years is less than this year's deficit (Previous post pointing this out).
  
• The Top Federal income tax rate would have gone up to 39.5%. That is like working two days a week just to cover Federal Income taxes, once getting to that rate. Then tack on more work time to cover state and local taxes, before taking care of one's own needs.
• The President's proposed 2012 budget plans to spend the equivalent of $12,000 per American. So, for my family of 4, the Government will spend $48,000. That is much more than what many families pay in taxes. And there is the reason why the Government has to borrow so much.
  

Congressman Lynch asks what about the single mother's and those in need? They are good questions, but there are other good questions that he and his Democrat buddies never bother to ask, such as

• What about all the other assistance these people seeking aid already receive?
  
• Who is working to help those receiving public assistance make their money go father?

As for the single mothers, how about demanding their respective single fathers pitch in? After all, if it is expected that I and other wage earners are expected to substantially support a good percentage of the population, then perhaps we should have a say on how these people are living their lives?

Before you declare this an unreasonable demand, look at how often aid money is wasted and abused. Remember the news of how Katrina aid given to evacuees was used in all sorts of wasteful ways, and now the Drudge Report is highlighting a Colorado Bill that would Ban the use of welfare cards at Strip Club ATMs. California has also be fighting abuse of their welfare funds. When is this all going to stop? The rest of us have to adjust to the current reality, so should the poor.

As for the elderly, I do have sympathies, but now I am starting to wonder about their innocence in all of this. They are the ones who elected the politicians who promised them the social welfare whose cost is now threatening to crush the system. They are the ones who permitted the Government to run deficits year after year for most of their lives. Social Security and Medicare entitlements are going to have to be adjusted. It is just a simple reality and given how people are living much longer, it is a fair adjustment to raise the retirement age, for starters.

Third, given that EVEN IF the Government raised taxes substantially, the budget will still spend more than it takes in in revenue, benefits are going to be cut. So Just who is robbing from who?

Decades of deficits have resulted in a mountain of debt. If Anything, the group that is being robbed is not the poor, but the children of this country. So as Representative Lynch would like to call out that Tea Party supporters are throwing the elderly into the harbor, what he is calling for is for all of us to saddle my generation and my children's generation with their irresponsible spending including their cleaning out of the Social Security Trust fund.

Now you would think that the poor would be concerned about their children having to pay for the support that they are receiving. However, given that they were never asked to pay for the benefits their parents received, why should they consider anything other than the possibility of the Government cutting back the benefits (and in many cases free lunches) that they are receiving.

Another Point. The Federal Government is not the only Government around. States are also responsible for providing public services, such as fire, police and education. If the people of a state want more, they they should be asked to pay more. This is not happening, partly because the Federal government has been footing the bill. For example, why is the Federal Government sending aid to Alaska while at the same time the State collects no income tax? Who considers this fair.

There is much more to this issue. Again last night I heard another Congressman use the Reverse Robin Hood comment. And I suspect that she will not be the last.

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Bush Tax Cuts Are not the Problem, Spending is...

Seems that President Obama has set his sights on letting the Bush tax cuts expire for the richest Americans at the end of the year. This move is purely designed to both punish the richest Americans as well as a political move for the next election to show his core voters (Other than those rich idiots who voted for him) that he is doing his best to 'stick it' to the group of American who already pay the most taxes. They claim that the rich need to pay more because otherwise the deficit will continue to grow.

The reason why I call BS on this is that reinstating the Bush Tax Cuts will do absolutely nothing to reduce the deficit. Take the following story found on the Huffington post noting that the cost to the Government to keep the Bush Tax cuts for the next ten years is between $2.5 and $2.9 Trillion. That is about $250 billion a year.

President Barack Obama favors making the cuts permanent for middle class families, those individuals making more than $200,000 and couples making more than $250,000.

The Tax Policy Center, a Washington think tank, estimates it would cost $2.9 trillion over the next decade to extend all the tax cuts, while Obama's plan is estimated at $2.5 trillion over 10 years. - Huffington Post

Now take the following recent news noting that President Obama's Administration has managed to add over $2.5 trillion to the national debt in just 19 months in office.

(CNSNews.com) - In the first 19 months of the Obama administration, the federal debt held by the public increased by $2.5260 trillion, which is more than the cumulative total of the national debt held by the public that was amassed by all U.S. presidents from George Washington through Ronald Reagan. - CNS News

Given the numbers above, any politician who claims that we have to end the Bush tax cuts for the sake of the national deficit should be run out of office. These idiots in power will just use the addition revenue as a reason to spend twice as much.

Take a look at this graph (from Wikipedia) noting the difference between what the Government is taking in and what it is spending.

The problem is not revenue collection. It is spending. The amount of additional revenue by expiring the tax cuts for the richest would not be enough to cover Medicare spending in the graph above. And as you can see, it is a mere sliver of the additonal revenue needed to close the gap.

And for all these people out there saying that it is OK for people earning more than you to pay more taxes, keep in mind that they already pay more.

Also, as noted in my post 'Obama's 2010 Budget Spends Almost $12,000 Per American!' the level of Government spending is not only unsustainable, it is truly an irresponsible amount of spending:

Now comes the President's 2010 budget that is also screaming that this is something the Country can't afford.

After taking office in January, Obama released a bare-bones version of his budget in February that offered a spending plan for 2010 carrying a price tag of $3.55 trillion. The White House revised up the size of the spending plan to $3.59 trillion. - Yahoo News

At $3.59 Trillion, the Government will be spending around $11,970 per American (Given 300 million Americans). That comes out to Government spending of $47,900 for a family of four.

This is an impossible spending figure for the country to sustain. Hell, it will take years, most likely decades of taxation just to pay this one year's deficit back. - Link

I can't believe that there is any excuse to continue spending like this. None.

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UK Revenue 6,465 Pounds per Resident. Gov't Spending 10,900 Each!

This all started when I saw this image and related post 'Tax cheats cost you £1,150 a year' on the website Tax Research UK:

This made me wonder, just how much revenue does the UK take in per person? Nicely enough, another post on the website links to their report 'Tax Justice and Jobs: The business case for investing in staff at HM Revenue & Customs' (Link to PDF Report) which provides a link to the UK's Revenue statistics. The total tax revenue estimated for the 2009-2010 tax year is 397 Billion British Pounds. (http://www.hmrc.gov.uk/stats/tax_receipts/table1-2.xls)

Now take the total population of the UK:

The estimated resident population of the UK was 61,383,000 in mid-2008, up by 408,000 on the previous year. Children aged under 16 represented around one in five of the total population, around the same proportion as those of retirement age. In mid-2008 the average age of the population was 39 years, up from 37 in 1998. - Office of National Statistics, UK

So:

• Revenue: 397 Billion
• Population 61.4 Million
• Revenue per person: 6,465
• Revenue per family of four: 25,870
  

This would mean, according to the numbers above, that the UK Government is taking in almost 6,500 Pounds per person. For the Government to not run a deficit, which would limit it to not spending more than it takes in, it would have to limit spending to no more than 6,500 pounds per person.

As we all know, the UK Government is not able to limit it's spending and according to the UK Treasury, they are spending much more than that and I dare say that they are spending an irresponsible amount of money:

Where taxpayers money is spent

Total public spending is expected to be around £671.4 billion this year, around £10,900 for every man, woman and child in the UK. It is set to rise to £701.7 billion in 2010-11. - UK Treasury

So, for a family of four, the UK plans to spend 43,600 Pounds. That is simply insane, not just for the fact that they are taking in nowhere near that amount of money but also for the fact that they plan to spend even more money, whether or not it is collected in revenue.

The issue here is that UK spending has gotten to a point that the majority of the population is unable to provide the Government with their fair share of the bill, and by 'fair share' I mean about 10,900 Pounds in taxes/Revenue to the Government.

So back to that claim above that 'Tax cheats cost you £1,150 a year'. Given the numbers above, the real thief in all this is the UK Government, spending well more that it's population, including the tax cheats, can afford to pay.

As for the United States, we are no better. See my earlier post 'Obama's 2010 Budget Spends Almost $12,000 Per American!'

Now comes the President's 2010 budget that is also screaming that this is something the Country can't afford.

After taking office in January, Obama released a bare-bones version of his budget in February that offered a spending plan for 2010 carrying a price tag of $3.55 trillion. The White House revised up the size of the spending plan to $3.59 trillion. - Yahoo News

At $3.59 Trillion, the Government will be spending around $11,970 per American (Given 300 million Americans). That comes out to Government spending of $47,900 for a family of four.

This is an impossible spending figure for the country to sustain. Hell, it will take years, most likely decades of taxation just to pay this one year's deficit back.

Think of buying a car for that amount of money. You would be looking at a five or seven year loan. Most all sensible families would opt for a more fiscally responsible alternative. Now picture buying and trying to pay off a car that costs $45,000 every year! This is the kind of debt that the Obama Administration is burdening families with.

This story gets worse:

The new White House figures bring the deficit estimates closer in line with the non-partisan Congressional Budget Office, which has forecast a $1.85 trillion deficit this year and $1.38 trillion in fiscal 2010. - Yahoo News

So, for 2009, the Government is borrowing $6,000 per American. That is $24,000 per family of four.

Then in 2010 they plan on borrowing another $4,600 per American ($18,400 per family of four).

I have a senior management position in a company that employs over 100 people. Looking at my own tax bill for 2008, I am guessing that the senior management's tax payments is nowhere near to covering the gap between what the staff is paying in taxes and what the Government is spending.

Now remember that half of the population pays no taxes. That means that the amounts need to be doubled for the half that does! - Link

So when a politician/leftist berates you that cutting taxes will kill children or make angels cry, Tell them that you already gave $40,000 of your family's share of the budget and if they couldn't save the children with that amount that they can't be the right person to spend any more.

Pre-Posting Update:
As I proof this article for posting I come across this example of abuse of the system in the UK. Keep in mind the statement above that 'Tax Cheats cost you 1,150 a year'.

Why work when I can get £42,000 in benefits a year AND drive a Mercedes?

By Paul Sims

The Davey family's £815-a-week state handouts pay for a four-bedroom home, top-of-the-range mod cons and two vehicles including a Mercedes people carrier.

Father-of-seven Peter gave up work because he could make more living on benefits.

Yet he and his wife Claire are still not happy with their lot.

With an eighth child on the way, they are demanding a bigger house, courtesy of the taxpayer.
More on the way: The Davey family at home

'It's really hard,' said Mrs Davey, 29, who is seven months pregnant. 'We can't afford holidays and I don't want my kids living on a council estate and struggling like I have.

'The price of living is going up but benefits are going down. My carer's allowance is only going up by 80p this year and petrol is so expensive now, I'm worried how we'll cope.

'We're still waiting for somewhere bigger.'

Mrs Davey has never had a full-time job while her 35-year-old husband gave up his post in administration nine years ago after realising they would be better off living off the state.

At their semi on the Isle of Anglesey, the family have a 42in flatscreen television in the living room with Sky TV at £50 a month, a Wii games console, three Nintendo DS machines and a computer - not to mention four mobile phones.

With their income of more than £42,000 a year, they run an 11-seater minibus and the seven-seat automatic Mercedes.

But according to the Daveys they have nothing to be thankful for.

'It doesn't bother me that taxpayers are paying for me to have a large family,' added Mrs Davey.

'We couldn't afford to care for our children without benefits, but as long as they have everything they need, I don't think I'm selfish.

'Most of the parents at our kids' school are on benefits.'

She added: 'I don't feel bad about being subsidised by people who are working. I'm just working with the system that's there. - Daily Mail, UK

Go read the whole story because the sheer sense of entitlement is amazing. You can bet that this family is not the only one sucking off the system. And leftists are demanding that Governments raise taxes on self-supportive people to support deadbeats. That's right, the Davey family are deadbeats and as far as I am concerned the aid should stop for them and they should be thrown on the street to fend for themselves. If that is too cruel, use the tax money that they are destroying and use it to support an entire village somewhere.

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Murtha Dead - National Deficit Reduced

Today comes new that Congressman Murtha has died.

Personally I would have preferred to see him ejected from Congress somehow, either by the voters or stuck in a jail cell for crimes related to the mass of pork-barrel funding he stole from the American people each year.

Instead I guess it is enough to know that thanks to his death the deficit for years to come will be reduced, since it is unlikely that any other Congressman will be able to get away with grabbing as much cash as he did.

You might say that his death was his last act of service. One that will be reflected in budget bills for years to come.

You might call my comments nasty, but he should not have been a Congressman attracting this attention. (Click on the image for previous Murtha posts)

(Congressman Murtha 'covering' the ethics of earmarks)

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