Economic growth won’t save us, not without serious cuts in government spending.
The most important issue facing America today is the national debt and increasing federal deficits. Our national debt now exceeds yearly gross domestic product (GDP).
The U.S is the wealthiest country in the world, but our government has the largest spending deficits and national debt in recorded history.
The budget deficit in FY 2018 was $800 billion, but the debt increased by $1,300 trillion, and is now $21,500 trillion dollars. Government accounting (oxymoron) allows for spending and loans outside of the budget. The practice of underreporting deficits is fraud and is not legal in the private market.
Note the US Debt Clock (here).
In simple terms, the national debt consistently increases more than the federal deficit, which will cause a devaluation of the dollar and eventually, a major financial crisis.
In FY 2019, the federal budget projects the following:
- Total revenue $3,422 trillion or 17% of GDP
- Total spending $4,407 trillion or 21% of GDP
In the best of times, regardless of tax rates, the federal revenue rarely exceeds 18% of GDP. This means based on projected spending, we cannot grow or tax our way out of the deficit because spending is projected at 22% of GDP.
To balance the federal budget in FY 2019, it would be necessary to cut all spending by 22%.
Yes, this means Social Security, Medicare, defense, food stamps and college loans. A cut of 22% would be devastating to our economy, which means we must begin now to reduce federal spending and debt as a national priority.
During the last major recession in 2008, we had a national debt of $10 trillion. Now, in 2018 we have a debt of $21,500 trillion. On average the debt is increasing at 1 trillion per year, but last year it increased by $1,300 trillion.
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