WALTER SHOEN: Country Is Lurching Toward Bankruptcy
The United States appears to be rushing headlong into fiscal calamity, with the 2009 budget deficit projected at $400 billion. The bipartisan stimulus package signed by President Bush will add at least $150 billion.
Unfortunately, the average American knows little and cares less for what may be an impending crash.
Boston University Professor Lawrence Kotlikoff recently authored a report for the Federal Reserve titled, "Is the United States Bankrupt?" Kotlikoff believes that " unless the United States moves quickly to fundamentally change and restrain its fiscal behavior, its bankruptcy will become a foregone conclusion."
Republicans who formerly championed smaller government and balanced budgets, abandoned their conservative beliefs and turned surplus into deficit. Congress under Democratic control has added 12,000 "earmarks," an infamous example of which is the Alaskan "bridge to nowhere." To his credit, Sen. John McCain has never engaged in the questionable practice of obtaining pork for his state. President Bush has ordered federal officials not to expend any funds not specifically authorized by congressional legislation, but his edict applies only to fiscal year 2009, when he is out of office.
America currently owes vast amounts to numerous creditor countries, and our export-import ratio is badly out of balance. Japan and China continue to purchase U.S. bonds and to underwrite our debt.
Fortunately, China, whose economy is growing at a 10 percent rate while ours is projected to grow at only 2 percent, keeps its currency pegged to U.S. dollars. However, the dollar has lost 60 percent of its value to the Euro.
We are continuing to export hundreds of thousands of jobs offshore to cheap labor, and job growth in the U.S. consists mostly of domestic service jobs. Forty percent of Duke University Engineering School graduates cannot find employment in their fields. Globalization is destroying U.S. jobs, and our government seems satisfied to have the World Trade Organization, which makes rulings in secret sessions, adversely affect American companies.
Moody's began giving credit ratings to nations back in 1917. Moody's has consistently rated the United States AAA, but our reputation may now be in jeopardy. Recently, Moody's warned that if the U.S. failed to control soaring costs of Social Security, Medicare and Medicaid, the nation's credit rating would be downgraded within a decade.
Our national debt is over $9 trillion. A trillion is the number 1 followed by 12 zeroes. If unfunded promises for Medicare, Medicaid and Social Security are included, our debt increases to $59 trillion, or $79,000 for every man, woman and child in America.
The plans of Sens. Clinton and Obama for pie-in-the-sky social programs would cost $900 billion each. "When this country is facing an entitlement crisis is it not madness to promise 50 million people, half of them immigrants, national health insurance?" asks Pat Buchanan.
The only way to fund these programs is to increase corporate and personal income taxes. American companies are already the most heavily taxed in the world, and the most successful Americans already pay 40 percent or more in taxes. And yet Clinton and Obama promise to increase these taxes.
Professor Kotlikoff argues that we must eventually come to grips with our fiscal crisis.
"We can do that," he said, "by choosing between bankruptcy, raising taxes or cutting benefits."
As baby boomers begin to claim benefits in the near future, and Democratic presidential candidates promise cradle-to-grave socialism to naive followers, our situation becomes ever more critical. Kotlikoff concludes, "We have a country at the end of its resources. It is exhausted, strapped, destitute, bereft, wrecked. In short, the country is bankrupt."
To fix this mess, we would have to immediately and permanently double personal and corporate income taxes or immediately cut by two-thirds the big three social programs. JFK and Ronald Reagan have proved conclusively that the economy grows, jobs are created, and income to the federal government increases when taxes are cut.
Meanwhile, as the nation plunges toward fiscal chaos, the dedicated, incorruptibly brilliant servants of the people in the U.S. Congress are spending millions of dollars and devoting countless hours determining whether his trainer injected steroids into Roger Clemens' derriere, and whether Patriot Coach Bill Belichick covertly videotaped practice sessions of his NFL competitors.
Intelligence sources say evidence indicates Islamic terrorists posing as Hispanic workers have infiltrated our borders. Hispanic gangs are killing American policemen in record numbers, and reports of drunk illegal drivers killing innocent Americans are rampant. An illegal alien raped and murdered an American nun, strangling her with her own rosary beads. One publication critical of the failure of churches to condemn illegal immigration asserts that average Americans bear the brunt of crime, congestion, pollution, building new schools and providing health care and other benefits for these intruders.
Our government cannot intercept terrorist communications, and yet Washington pols go on vacation. Nero fiddled while Rome burned. The World Turned Upside Down.
Dr. Schoen is a psychotherapist and retired college president who lives in Pinehurst. He may be reached at firstname.lastname@example.org.
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