Americans
are in denial about the simple fact that our national debt is the biggest
threat to our national security. National debt grew exponentially from Washington’s
profligate deficit spending, recessions, and wars.
When
I looked today at the national debt clock, each taxpayer owed approximately
$142,000, the figure changing rapidly based on factors such as the value of the
dollar, trade deficits, and the latest sums borrowed from U.S. taxpayers or from
whatever country willing to buy our Treasury Securities, T-bills, T-notes, and
T-bonds - China, Japan, and oil exporters being the largest buyers of U.S. debt
so far.
The
national debt to most Americans is something on paper in a faraway place that
does not concern or affect us. Americans have no idea how it grew so
exponentially large, where it came from, who owes it, who owns it, and how many
zeroes a trillion has.
Perhaps
the debt figure would become more real to Americans and take on dire
significance if each taxpaying citizen would receive a bill for $142,000
payable in full right now, no kicking the can down the road to our children and
grandchildren in exchange for our current comfort.
It
is true, our national debt is measured in dollars, which we can always print in
order to meet our payments. This is called monetizing the deficit. Doing so,
however, creates inflation, as too much money is chasing too few goods. A
responsible government should never print money in outlandish excess of GDP, the
amount of final goods and services produced in a year. If they do,
hyperinflation will occur, and severe devaluation of the currency.
“Since
1971, U.S. borrowed $50 trillion to produce only $13 trillion of goods and
services in a 40 year period.” Egon von Greyerz, a financial analyst with
Matterhorn Asset Management AG in Zurich, Switzerland, said, “From 1971 when
President Nixon ended the gold-backing of the dollar, virtually all of the
growth in the Western world has come from the massive increase in credit rather
than from real growth in the economy.”
The
mantra that the “rich are not paying their fair share” promoted by the MSM sound
bites and the Democrat ruling party prompted many to calculate what would
happen if we were to confiscate every millionaire and billionaire’s wealth,
what impact would have on our national debt, the accumulated budget deficits of
previous years. All the U.S. accumulated wealth would last a mere two months.
There
is a difference between income and wealth. The Democrats are talking about
taxing the rich (income), not taxing the wealth – big difference which voters
clearly do not understand. Taxing income will result in “spreading the wealth”
from producers to takers in the name of “social justice” and the subsequent consumer
spending, with no tangible assets created. Excessive tax discourages capital
formation and job creation, stifling economic growth. Perhaps that is the
political intent of the ruling party.
Taxing
the rich already brings in the lion’s share of revenue to the Treasury. If the
rich are taxed too much, who is going to create manufacturing jobs, the
government?
Average
earners and small businesses that pay taxes at the personal income tax level are
now the rich - the middle class will be taxed more when the Bush era tax cuts expire
and the Obamacare taxes will go into effect in January 2013, contracting job
creation. The Democrats and the President have no intention or concrete plans
to cut spending. Their main goal seems to be tax increases.
According
to Mark Steyn, if the government was to confiscate all of the $44 billion that
Warren Buffett has, it would only last four days at the current level of
spending.
Much
ado has been made in the press about Warren Buffet who did not pay the same tax
percentage as his secretary. When Mr. Buffett complained, I was not clear what kept
him from writing a “fair share” check to the IRS, matching his secretary’s
percentage.
Mark
Steyn calculated again that, if everyone’s tax indebtedness would go up
according to this Buffett rule, the deficit created by the Obama administration
in 2011 would be paid off in 514 years and we would still have the deficits
created in the other three years of this presidency.
The
national debt has exceeded $16.3 trillion but Gross Domestic Product (all the
final goods and services produced in a year domestically) is only $15.3
trillion, one trillion short. The federal revenue from taxes is $2.4 trillion. We
have spent almost 7 times what we raise in taxes annually.
The
problem is not that Americans, rich or poor, are not paying enough taxes, the
problem is that Congress and this administration are spending too much money.
Spending to GDP ratio is 41 percent.
We
have paid so far in 2012 almost $4 trillion in interest from excessive borrowing
when our money supply from cash and savings is $10.3 trillion.
Our
national debt has exploded in the last four years. During President Obama’s
first three years in office, it grew by $4.7 trillion, an increase of 45
percent. (factcheck.org)
Our
current policy seems to be putting pressure on the U.S. dollar until two
options remain - default on the U.S. debt, or monetizing it by printing more
money. If we default, as in any case of bankruptcy, creditor nations would
demand payment in American assets – our oil fields, mines, land, parks,
monuments, buildings, military bases, and even the indentured servitude of
generations of taxpayers.
Can we refuse to pay our national debt? We could but the consequences might not be so pleasant. Britain, Germany, and Italy blockaded the ports of Venezuela during the Venezuelan Crisis of 1902-1903 when dictator Cipriano Castro refused to pay foreign debts and damages suffered by European citizens in the Venezuelan civil war.
Defense
Secretary Leon Panetta said the following during the November 20 speech to the
Center for a New American Security (a think-tank in Washington):
“One
of the national security threats is the question of whether or not the leaders
we elect can, in fact, govern and can, in fact deal with the challenges that
face this country.” (Emelie Rutherford, Defense Daily, November 26, 2012)
Secretary
Panetta was initially questioned during this meeting why the Senate failed to
pass the Law of the Sea Treaty (LOST). Most Americans are actually glad that LOST
was not ratified since it is part of U.N. Agenda 21’s plan of global
governance.
Sequestration
may not be such a good idea when it involves the military. Si vis pacem, para bellum, the Romans said, “if you want peace,
prepare for war.”
Panetta
acknowledged that budgeting “can’t just be about cutting, it’s got to be about
investing, investing in space and cyber, investing in unmanned systems,
investing in the kind of capability to mobilize quickly if we have to. And most
importantly, maintaining our defense industrial base in this country so that we
are not in a position where I’m forced to contract out the most important
defense capabilities that I need. I can’t do that. I can’t just contract those
out to another country. I’ve got to have that capability here in the United
States.”
National
debt is the number one threat to national security. If we keep squandering
trillions of dollars borrowed from our potential foes and have nothing to show
for our spending, except increasing dependency of our population on welfare,
food stamps, and entitlements, if we cut NASA and rent space on Russian
flights, if we spend so much that we are no longer able to invest in
infrastructure, technology, medicine, space exploration, industry,
manufacturing, and defense, our integrity as a powerful nation is severely
threatened and damaged.