Posted on 10/11/2009 7:11:01 PM PDT by mathprof
In 2009 about 40% of income taxes will go towards debt interest payments.
If you think those town hall meetings over health care were fierce, wait until Americans come to understand the threat to our national financial survival posed by the interest on the government's credit card.
When the government spends more than its revenue, there is a budget deficit. These deficits are paid for by Washington selling interest bearing Treasury securities. If the government were ever to default on its promise to pay periodic interest payments or to repay the debt at maturity, the United States economy would plunge into a level of chaos that would make the Lehman bankruptcy look like a nonevent.
It is the interest on the national debt that makes our future unstable. The exploding size of that burden suggests that, short of devaluing the dollar and taking a large bite out of the middle class through inflation and taxation, there is no way to ever pay down that bill.
[snip]
In stark but simple terms, unless Americans are made aware of this financial crisis and demand accountability, the very fabric of our society will be destroyed. Interest rates and interest costs will soar and government revenues will be devoured by interest on the national debt. Eventually, most of what we spend on Social Security, Medicare, education, national defense and much more may have to come from new borrowing, if such funding can be obtained. Left unchecked, this destructive deficit-debt cycle will leave the White House and Congress with either having to default on the national debt or instruct the Treasury to run the printing presses into a policy of hyperinflation.
(Excerpt) Read more at online.wsj.com ...
got von Mises? ;)
“In 2009 about 40% of income taxes will go towards debt interest payments...”
And hence the talk about the two areas where taxes could still be collected from people, BIG-TIME, without them being able to do anything about it. The first is a VAT (essentially a national sales tax - and recently talked about by Pelosi), and the second is the cost of driving. England is being told to tax drivers by the mile (called road pricing, over there), with rates going over $2.00 per mile (i.e., during times that the government doesn’t believe you should be driving).
This debt is real, and it will more than double before Obama leaves office, if he gets a second term. The Income Tax will have to be completely dedicated to it.
Well...we won’t be paying any income taxes for the next 2-3 years....hubby get’s layoff/early retirement on this Wednesday! Luckily we’ve saved for this .....FWIW....AND, depending on the next 5 years....for whatever it REALLY will be worth...in actual dollars!
...seriously? LOL! We need a general default and subsequent turnover of leadership at all levels. ...need new blood to replace the elite, interbred retards once in a while.
Most people don’t realize this, but the national debt is our money supply. The US government doesn’t actually issue any money except for coins, the rest (99%+) is created by banks in the form of loans. The government, and thus us as taxpayers, is in debt to private banks (such as the Federal Reserve) that buy government debt with money they create out of thin air. In other words, every dollar in existence can be traced backed to government debt monetized by a central bank.
It is worse than people think. There are two very serious problems.
The first is that Social Security payments went into the Red this year. From here on out the SS system is a drain on the system.
The other problem is nastier and more subtle. The only hope of paying off the debt is through inflation, but we are now walking a tightrope between debt and deflation. Slowing the rate of growth of the debt will implode the economy (deflation, by shrinking the money supply). Continuing as we are, monetizing the debt, can only last as long as all the other markets (real estate, financials) contract. Once there is no counterbalancing contraction of the economy left we will be faced with hyper inflation.
Our best hope is a period of stagflation just like the Japanese have been going through since the early 90’s.
* if you are a biological or step child to the person in office, you cannot be appointed to it or elected to it for at least 25 years (no kids running for Daddy's office)
* no staff member for the prior administration in any capacity can seek to fill the vacant elected or unelected government office in that region (so that chiefs of staff and aides don't get the prior person's job by default)
* no individual who gave more than $500 in campaign contributions, bundled contributions, or served on their electoral board or campaign can seek their office or unelected position in the region for 10 years
We now have a government written to support incumbents. Our leadership positions should not be based on who was married to, related to, worked for, or were major supporters for the current person in office. There are three hundred million people in this country. We need to limit the "inbreeding" by law so the other 299.9 million have a chance at office.
It`s all over. This country is finished.
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