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A Voice from Fly-Over Country
October 13, 2009
Is It Time for Taxpayers to Bailout?
by Robert L. Hale
MINOT, NORTH DAKOTA — Are the doom-and-gloom stories of the next crisis about to change life “as we’ve known it” ever going to cease? Not likely. These crises — global warming, global cooling, food shortages, the population boom, and more — generally benefit their promoters. In the end, the predicted disasters rarely materialize. At least, not the disasters we have been told will befall us. More often than not, change brings substantial benefits to virtually everyone.
This column is not an attempt to strike fear of some new crisis. Its intent is to inform readers what our elected federal officials have done and are doing with our earnings and our financial future.
The Mid-Session Review?Budget of the U.S. Government?Fiscal year 2010 is hardly bedtime reading. But it is sobering. The U.S. taxpayers (you and me) are more than $11 trillion dollars in debt. The number is so huge most people cannot comprehend it and simply ignore it.
To understand the enormity of the numbers, it is helpful to think of a dollar as one second. A million seconds is 11.57 days. A billion seconds is 31.71 years. A trillion seconds is 31,709.79 years. To pay off today’s federal debt, each person in the U.S. would have to plunk down $35,947.71. A family of four would have to come up with $143,790.85. Could you do that?
How do our elected officials plan to deal with this debt? They plan to increase it by an additional $10 trillion dollars to $21 trillion by 2019. This will raise the debt of individuals to $67,593.28 and the debt of a family of four to $270,373.13. However, more than half of the U.S. population pays no federal income taxes. Thus, for those paying taxes the responsibility is approximately $135,000 and $540,000, respectively.
Prudence would lead a rational person to stop increasing debt and reduce it. Instead, our elected officials are proposing to almost double our debt over the next 10 years. In 2009, interest on the federal debt will be $173 billion. Projected interest on the debt in 2019 is $829 billion!
Official projected individual income tax collections for 2019 are $2,114 trillion — more than double the $904 billion projected for 2009. In 2019, almost half of individual income tax collections will be needed to pay interest on the debt, up from less than 20 percent today.
These figures assume voters do not put a stop to this irresponsible deficit spending. They also assume there are countries willing to continue lending to a country spending far beyond its means. Those that have money generally do not lend to spendthrifts and irresponsible borrowers.
Eventually, the pool of available money will dry up. That day may have arrived, and if not today, it will be soon. What are the consequences?
No company and no country is too large to fail. Those who disagree need only to look back — GM, AIG, Enron, Washington Mutual, and the host of entities no longer with us. Nor are the Greek, Roman, Egyptian, Prussian, Ottoman, or Spanish empires with us.
The most prudent thing to do is to stop deficit spending now, not tomorrow or next year. Every dollar of additional debt will make the consequences more severe and the recovery more difficult. Our elected officials are clearly unable or unwilling to fulfill the duties they have to those they represent. Instead, like gambling addicts they believe they can win it all back at the next table.
This leaves us in an unenviable position. We can stay on a plane, out of fuel, diving straight to earth, and hope it will defy the laws of gravity. Or we can put on a parachute and get off. The first option provides no chance of survival. The second does.
In political terms, it is time for responsible citizens to take back control of the country. It is time to stop deficit spending and live within our means. This requires budgeting to pay off the debt and discarding all programs that require borrowed money to fund. It takes discipline and responsible leadership — something our elected officials lack.
Those who disagree need to explain how an $11-trillion dollar debt with plans to increase it another $10 trillion shows discipline or leadership. It does not take a rocket scientist to figure out that one does not pay off debt by doubling it. Where does government get money? Only from taxpayers. Think about it.
If we continue to incur debt and fail to control spending, say a prayer and prepare for the crash.A Voice from Fly-Over Country archives
A Voice from Fly-Over Country is copyright © 2009 by Robert L. Hale and the Fitzgerald Griffin Foundation. All rights reserved.
Robert L. Hale received his J.D. in law from Gonzaga University Law School in Spokane, Washington. He is founder and director of a non-profit public interest law firm. For more than three decades he has been involved in drafting proposed laws and counseling elected officials in ways to remove burdensome and unnecessary rules and regulations.
See a complete biographical sketch.
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