Government debt. In June Fortune reported that “chronic deficits are putting the country on a path to fiscal collapse.” The United States Government debt exceeds $12 trillion, or almost $40,000 per U.S. citizen. By 2019 it will exceed $17 trillion, according to the Congressional Budget Office. Just the interest on the national debt gobbles up more than 40 cents of every dollar you pay in income tax, reports the Wall Street Journal.
We`ll be poorer. To pay off the debt and interest, politicians will probably raise your taxes, encourage inflation, or both. Those tax dollars could have been used to innovate and create new jobs. They won`t exist. In addition to be being a hidden tax, inflation drives up interest rates, and hence the cost of financing new business ventures with loans.
Last week 11 Senators co-sponsored a “Bipartisan Fiscal Task Force” to “address the nation’s long-term budget crisis.” But earlier this week nine of these Senators (including Michael Bennet and Mark Udall) voted for a pork-laden $1.1 trillion spending bill. Hold on to your wallet — politicians cannot resist buying political favors with your tax dollars.
As economist Frederic Bastiat observed long ago: “Everybody wishes to live at the expense of the state, but they forget that the state lives at the expense of everybody.”
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Thanks to Russ Roberts at Cafe Hayek for the linking to the Bastiat quote.
Congress’ plan to cut the deficit by raising the debt limit now, then reducing spending later, is like trying to lose weight by eating a box of chocolate chip cookies now, then promising to exercise next week.
So if you have an opinion that you can express in 40 words or fewer, send it to the Post!