REFLECTIONS

Posted on December 8, 2010

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DEFICIT PROBLEM MUST BE SOLVED

Since 2001, the federal government has spent more each year than it has brought in, and these deficits are large numbers. They become more meaningful if we look at them on a per person basis.

For example, the $1.4 trillion deficit this year means that the federal government spent about $4,500 per person more than people paid in taxes. To erase this deficit through taxes each of us would have tto pay an average of $4,500 more in taxes this year. This is unreasonable.

Or, we could cut an average of  $4,500 in government services for each person. Of course we could do a combination of tax increases and spending cuts.

Neither of these three options is easyh.

We have a magnificent fiscal problem, and its solution is not simple. Many people think the deficit can be solved without forcing them to pay more taxes or give up the government programs that affect them.

To solve our fiscal problems we are going to have to give up something, and probably a lot more than we think. But our understanding of that reality has been very slow in coming. Many of us thing that someone else will pay the bill, or we will just pass it on to the next generation.

Everything including cutting spending and raising taxes must be on the table or else we will continue to have large deficits and those deficits are hampering our return to prosperity. Soon China and other nations which we owe will be coming for their money. We are at war against fiscal lunacy.

I am convinced that Americans can solve any problem. Our new Congress and the President must work together to solve this deficit problem.

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