The Presidential election is history now leaving us awash with mind damaging cries of "tax the wealthy" and a myriad of other tax increase proposals. I have this vision of us driving straight towards a cliff but only looking out the side window. It doesn't take a graduate degree to figure out that you can't continue to spend more than you bring in without having the whole process crash. What one does need is the courage and responsibility to clearly look at the problem and accept the answers that are there. Indeed, "It really is still the spending, Stupid!" Endless analysis have proven that there is insufficient revenue held by the wealthiest Americans and Corporations available to be taken in taxes to sustain the spending trajectory we are on.
The spending must be cut. Let's take a look at where we spent the money in 2012.
The federal government has closed out its fourth straight year of trillion-dollar-plus deficits, and the imperative to rein in spending has never been greater. Because all government spending gets paid for through either taxes or borrowing-both of which burden the economy-spending reduction is an essential condition for promoting economic growth.
As this 2012 edition of Federal Spending by the Numbers shows, total federal spending for fiscal year 2012 reached $3.6 trillion or 22.9 percent the size of the entire U.S. economy. In the past 20 years, federal outlays have grown 71 percent faster than inflation. The average American household's share of this spending is $29,691, roughly two-thirds of median household income. This relentless growth is projected to continue, pushing total government outlays to $5.5 trillion a decade from now, and to about 36 percent of gross domestic product (GDP) in the next 25 years.
Federal entitlements are driving this spending growth, having increased from less than half of total federal outlays just 20 years ago to nearly 62 percent in 2012. Three major programs-Medicare, Medicaid, and Social Security-dominate in size and growth, soaking up about 44 percent of the budget. All three programs are growing faster than inflation, and-when joined with $1.7 trillion in new Obamacare spending-will drain about 18.5 percent of the nation's total economic output by mid-century.
Because that is about the historical annual average of total federal tax revenue, it means all other government programs-national defense, veterans' health care, transportation, federal law enforcement, and others-would effectively have to be financed on borrowed money.
Other entitlements continue growing as well. Anti-poverty programs have surged by 49 percent in just the past decade, even after adjusting for inflation. Spending for food stamps alone has more than tripled since 2002. Health programs, including Medicaid, have increased by 38 percent, and housing assistance by 48 percent.
Although these entitlement programs have dominated the government's spending growth, discretionary spending-spending authorized by annual appropriations bills-also has grown by 40 percent more than inflation, to $1.289 trillion. Spending on non-defense programs has grown 29 percent. These outlays peaked in 2010 due to the stimulus bill, but remain 7 percent higher than their pre-stimulus level of 2008.
The result of this increasing deficit spending-which is financed by borrowing-is growing debt. If current policies continue, debt held by the public will approach 90 percent of total economic output by 2022, and will be twice the size of the entire economy 25 years from now.
There is still time to change course-but that time is growing short.
It's time for some good old fashioned Bible hugging, gun toting, lipstick wearing politics.
Hard decisions lay ahead of us and the future of our children and this country will depend on our courage and faith to stop giving away our money.
"Once the people find they can vote themselves money, that will herald the end of the Republic." - Benjamin Franklin
"The Utopian schemes of leveling and a community of goods are as visionary and impractical as those which vest all property in the Crown. [These ideas] are arbitrary, despotic, and, in our government, unconstitutional." - Samuel Adams, President of the United States
And now, from our President Barack Obama:
"..and I think when you spread the wealth around, it's good for everybody."
William Perugino is active in local and regional politics and can be reached at email@example.com.