Filed under: history, Minnesota, Politicians, Politics | Tags: debt crisis, entittlements, government spending, history, Medicaid, Medicare, Minnesota, politicians, politics, taxes
The recent budget mess in both St. Paul and in D.C. and now the stock market concerns have really got folks talking about our economy. It seems Americans have voted themselves so much more than they can afford. Just Medicare, Medicaid, Social Security and the interest on the debt take up all of the money that are paid in taxes. What do we cut? One mans pork barrel program is another man’s lifeline. Do we dump them all? Then when governments get busy and balance the budget, as they are supposed to, we have people marching on the state house. There are not enough “rich” people to pay for all of the things that we are “entitled to” anymore.
Spending more than the government takes in in taxes is not new, but until the modern era it was reserved for war time or really extreme circumstances. We worked our way out of the Great Depression with the public works programs that FDR brought to this nation. It was about then that our government found out it could buy itself into power and “money for the masses” really took off. That worked until too many things were promised and not enough people were willing to pay for them. We are a nation on the dole. Almost everyone gets some form of government help.
Now don’t let your eye glaze over with the rest of what I have to say, this is important. It will help you to understand how we got to where we are today.
When Reagan took office our taxes were at about 20% of our nations Gross Domestic Product (GDP) our government spent about 20.6% of our GDP. The people elected him to cut taxes and he did, but spending also went up so that when he left office our nation was being taxed at a rate of 18% of our GDP while spending was at 22.4%.
George H.W. Bush and Bill Clinton continued to cut spending and taxes to the point that when Clinton left office we had a budget surplus. Then came the George W. Bush tax cuts, two wars and expanded health care benefits, all unpaid for. As long as our nations economy continued to expand we could depend on increasing revenue from taxes even at the lower rate. Today our taxes stand at 15% of our GDP and our spending is at 24% of GDP. With our nations slumping economy we have little hope of cutting our way out of this mess.
There really is no easy way out of this mess. Cutting spending only on the smaller programs will not fix our government mess. Like it or not we are going to have to “fix” some government entitlements. Some folks that get Social Security, Medicare and/or Medicaid coverage are going to have to be cut. We have to get our government debt under control before the interest on the debt eats up all of each years taxes.
This is going to hurt folks, but it comes down to this. Do we want everyone to suffer, or are all Americans going to buckle up and take on the budget problem. Do we make the hard decision and protect the most fragile, but have everyone else pay up. The debt has gotten too big to just sock it to the richest 1%. American is at risk right now. We all are rich in the eyes of the world. We all are still the envy of the world. We can work our way out of this crisis if we all demand a little less.
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