THE ENTERPRISE--THE DEFICIT & THE ELECTION--A PROBLEM SO SIMPLE, SO POORLY UNDERSTOOD
I am sending this to you all as a separate "edition" in hopes that you will forward it to everyone you know--whatever their political persuasion. I was at a rally where Marco Rubio spoke today (in Columbus, on Romney's behalf--while Obama was not all that far away telling more of his patented half-truths)--Rubio dwelled on the deficit and debt issue at length--and its impact on our future--as individuals and as a country.
Financial columnist John Mauldin, puts it much more succinctly:
The Economic Consequences of a Political Decision
The preview of economic consequences depends on your view of what the most important issues are that need to be decided (in terms of economics). Let me list my top ten.
1. The Deficit
2. The Deficit
3. The Deficit
4. The Deficit
5. The Deficit
6-10. Everything Else
I am only being mildly flippant. How we deal with the deficit affects everything else. And not dealing with the deficit leads to a disaster of biblical proportions, the equivalent of all eight of the first eight plagues. Ask Greece or Spain.
Here is the problem--"the deficit crisis" stated in the simplest way I have ever seen!
Minimal reading is required. Just look & listen to the linked video. It is non-partisan. It is simply factual math.
CONCLUSIONS:
Entitlements we have been promised and paid into/for are no longer sustainable due to a government that has promised more than it can deliver, and spent all the money, and then some--on other things.
All other arguments are irrelevant. The money is GONE! The ONLY way out of this without cataclysmic consequences is to stop all spending increases of very kind, and start trimming back EVERY KIND OF SPENDING including the Medicare & Social Security I currently get ( that you'd like to get someday ) AND increase taxes by reforming the tax code. Why?
Because we can't even save our way out of this big a hole. We must fuel the growth of the economy, leading to job growth, income growth, etc. Increasing taxes, unless done very carefully will have the opposite effect--depressing economic growth. But, some taxes can be increased by eliminating nearly all the deductions (which de facto "closes loopholes"). This will increase taxes on higher earners, but in a manner hat lets them alter their behavior (and investment plans) to soften the blow--and not stifle economic growth (too much).
I don't see the US totally shifting from Income Taxes to Consumption taxes (overall, this is arguably a "fairer way to tax, one which is used extensively in Europe--VATs) because income taxes can be specifically set up to help the poor and tax he rich--"the American way, it seems, to achieve "fairness!"--Penalizing people for their economic success! The problem with VATs is that once you have one, the way to solve every spending problem is to increase the VAT. At least one European country I was in recently (I think it was Ireland) is functional bankrupt and that is with a VAT of 23.5%!
"ONE OF THE IMPORTANT RULES IN BUSINESS AND IN LIFE: "WHEN YOU ARE DEEP IN A HOLE, QUIT DIGGING!"
Because we can't even save our way out of this big a hole. We must fuel the growth of the economy, leading to job growth, income growth, etc. Increasing taxes, unless done very carefully will have the opposite effect--depressing economic growth. But, some taxes can be increased by eliminating nearly all the deductions (which de facto "closes loopholes"). This will increase taxes on higher earners, but in a manner hat lets them alter their behavior (and investment plans) to soften the blow--and not stifle economic growth (too much).
I don't see the US totally shifting from Income Taxes to Consumption taxes (overall, this is arguably a "fairer way to tax, one which is used extensively in Europe--VATs) because income taxes can be specifically set up to help the poor and tax he rich--"the American way, it seems, to achieve "fairness!"--Penalizing people for their economic success! The problem with VATs is that once you have one, the way to solve every spending problem is to increase the VAT. At least one European country I was in recently (I think it was Ireland) is functional bankrupt and that is with a VAT of 23.5%!
"ONE OF THE IMPORTANT RULES IN BUSINESS AND IN LIFE: "WHEN YOU ARE DEEP IN A HOLE, QUIT DIGGING!"
Clinton was right in one regard: math doesn't lie! We are deeply in debt and our president wants 4 more years to "keep digging."
Sorry for so many words, but political wrangling won't fix this DEFICIT CRISIS! Which candidate's set of policies and whose ideology is better suited to address this deficit crisis? I know my answer. (HIS INITIALS ARE MITT ROMNEY!)
OBAMA HAS FAILED; WE NEED TO "FIRE HIM." TO REELECT HIM WILL MEAN FOUR MORE YEARS OF MISERY!
BEST JOHN
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