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Wednesday, September 5, 2012

Federal Debt Holders: Citizens of the United States

FoxNews has a report on the $16T deficit, and who owns it, even as another report informs us that US competitiveness fell for the 4th straight year, last week jobless claims rose to 374k, and Americans earn less money on average. That's a lot of bad economic news, and it's not all that I could be including either. From FoxNews:
Mitt Romney lamented "the enormous debt" being handed the nation's children, while House Speaker John Boehner called it a "sad reminder of President Obama's broken promise to cut the deficit in half."

But if you thought China's been doing most of the bankrolling, you might be surprised to learn who really holds our federal mortgage.

Fully two-thirds of the national debt is owed to the U.S. government, American investors and future retirees, through the Social Security Trust Fund and pension plans for civil service workers and military personnel. China, it turns out, holds less than 8 percent of the money our government has borrowed over the years.
I'm personally relieved China isn't a bigger shareholder, but 2/3 of the debt held by various U.S. pension and retirement plans? I don't understand how the Democrats get away with not solving this problem over and over again, and they're the ones who constantly try to scare senior citizens that the GOP is trying to cut their benefits! Not that all seniors are buying it; a majority of them support Ryan's budget plan.

No, actually, the GOP is not into cutting benefits. They're trying to return the programs to fiscal solvency, not use these programs to hide the enormous federal deficit, leaving benefit holders eventually with nothing whatsoever. The program wouldn't change for current users, just later ones. And if the later ones were smart and not buying the garbage the Democrats tell them, they'd realize they're lucky if they get any benefits at all at the rate the federal government has been spending in the past four years. The government can't issue IOUs forever or checks forever. Someday they'll be worth nothing - they'll bounce. It's not like the government hasn't been downgraded yet: that's already happened.

The GOP is the party of solutions. They don't want the United States to dig itself into a deeper, darker hole. Mitt Romney has an excellent plan to not only grow GDP and lower unemployment and restructure government benefits, his plan simultaneously tackles the deficit as a result! Just like in Reagan's day: tax cuts + job growth = bigger federal revenue because there are more taxpayers and more income to pay taxes on, leaving government less need to spend money they don't have. Plus, Mitt Romney wants to cut back the size of government, realizing we don't need overlapping agencies or ineffective programs when faced with government spending and deficit of this magnitude.

In contrast, Obama's only solution seems to be to spend more taxpayer money, which defeats all those purposes by shifting larger financial burdens on employers and employees, creating an ever larger gap between budget and expense, and inflation means our dollars don't stretch as far. Fewer taxpayers + less money to pay taxes on + bigger debt + growing government expenditures = a deeper, darker debt hole, deepening at an ever accelerated pace.

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