It's Got to Stop

I posted the following on Facebook earlier today.  I read one too many articles about our National Debt combined with one more "It's their fault" statement from a politician and I was convicted.

"Reduction of the national debt will take sacrifice from ALL of us. Across the board cuts in ALL government programs, a likely raising of taxes, and doing it with a humble and giving spirit. ALL THREE, NO LESS. We can't keep GIVING money that we are BORROWING. That's what we're doing. Every dollar we spend on any program while we still owe almost $18 trillion and counting rapidly is irresponsible and cruel to our children's children. We MUST step up in a bi-partisan way. No more finger-pointing, just problem solving."

This country has gotten to a point where, if it's not a crisis ... if people's heads aren't falling off ... then we don't dedicate ourselves to solving a given problem.  Or maybe it's the "old football injury" scenario, where it's been an issue so long and we've heard it too many times that we now think it's normal.  Maybe it's because the majority of American's just aren't educated in economics and financial matters and have no idea the deep hole in which we now find ourselves.

We are in a crisis situation.  We now have more debt than we produce as a country.  This term is GDP (Gross Domestic Product).  And it's what a nation produces in a given year.  We owe MORE than that.  

Yet we give like we're made of money.  Aww, isn't that nice of us.  To give other people's money away as though it were ours.  Such a nice country we are.  This must stop.  This must be reversed.  

No more blaming the other guys.  No more stalling.  No more raising the debt ceiling - I think most people don't even know what that means.  Raising the debt ceiling?  That's like taking a spoiled rotten teenager who's been spending uncontrollably on shoes and cars, and partying, and jewelry ... never paying the credit card companies for the purchases year after year after year, then saying, "You don't have any money left?  No problem, here are three more credit cards.  Go crazy."  It's insanity, but days, months and years pass and we haven't done anything about it.

And if I hear, "Well, we reduced the budget deficit" one more time, I'll flip out.  Translation:  We are still spending way more money than we are bringing in, but we're spending less than we were before this month.  Woopety-doo.  So, the spoiled teenager only bought 5 new pairs of shoes this month instead of 6, when there was no money for shoes at all.  And we should celebrate that?  What have we become?

Some think everything is fine because it FEELS fine.  But that is an artificial euphoria they feel.  The truth:  We are floating around on the comfort of someone else's money.  And just like it will be for the spoiled teenager, the party will come to an end for us, too.  In fact it should have ended a few times, but we keep adding to it, driving faster and faster PAST the point of no return.  

So why should we care if we're ALREADY past the point of no return?  Answer:  Responsibility, integrity, and reality.  Equally important - other countries will NOT forgive our debt.  And if we can't pay with money, we will pay with property, land, our freedoms, etc.

We must stop, take a look at where we are fiscally, then create a plan, KNOWING it will be hard - VERY hard.  KNOWING that we will all have to sacrifice - more sacrifice than we've ever seen.  KNOWING it will take 10-20 years, and persevering to the end no matter how much it hurts.  But KNOWING we will be doing it for our children and children's children.  And THAT is what matters.  Time to get off our comfy American futon and face the real world.  We are spoiled.  Spoiled rotten.

Easy to point out the problem.  Harder to solve the problem.  So, here is a "straw man" proposal for eliminating the debt in 20 years and getting us on a balanced budget.  It will be modeled after the Dave Ramsey approach to PERSONAL budgeting (i.e. Financial Peace University), combined with simple biblical principles of tithing, as Dr. Ben Carson has suggested in his book, One Nation:  What We Can All Do to Save America's Future.  These ideas are not hard and fast - they are a first pass set of suggestions to start the conversation.  But we've got to get to a set plan fast, then begin executing on it a.s.a.p.  Before the end of 2015, so we are out of debt with a balanced budget by 2035.  As Dave Ramsey says, "We must begin living like no one else, so that one day we can live and give like no one else."

We must begin living like no one else, so that one day our progeny can live and give like no one else.

Here's how it would work:

1. The Debt Snowball.  Pay off the highest interest debts (or the most threatening debt, for whatever reason) first.  Pay the most we can per month for all debts.  Let's say, $1 billion per month per debt.  Once one is paid off, put that payment toward the next smallest, but also continue to pay the current $1 billion per month (so $2 billion/month).  Then the next at $3 billion per month.  And so on.  I was too lazy to work out the math here, but that monthly amount to start with likely needs to be substantially more.  But keep doing this until all debt is paid off.  If we accomplish this before 2035, let's have a nice party.  I'll bring the Funyuns.
2. The Incredibly Shrinking Programs.  Starting in 2016, 10% reduction of ALL government programs - no exceptions (this is another Ben Carson special).  Then an incremental 10% the following year.  Then a third incremental 10% reduction in 2018.  Maybe we space it out a bit more, but you get the idea.  At the end of this 1-2-3 punch, we have reduced overall spending by 27.1%.  Then we sustain that through 2035.  No increases to budgets except maybe for normal inflation (3-4%).  
3. Tax Adjustment (medium term).  25% flat tax starting in 2016.  We've got to cut deep, but it needs to be fair and balanced.  No more taking advantage of the financially challenged in our country.  What I mean is, everyone pays their fair share and no more "they make more, so they should pay a bigger percentage" nonsense.  As Dr. Carson states in his book, if someone makes $100 billion per year, they will pay $25 billion.  No more complex tax systems where loopholes exist.  Just pay your share.  Tax form has two simple questions:  "How much did you make?", then "What is 25% of that?"  Insert check.  Mail.  For someone who makes $10,000 per year, you pay $1,000.  Same tax form.
4. Tax Adjustment (long term).  10% starting in 2035.  Once we're to the goal line (a.k.a. zero debt), we can let up ... but maintain 10%.  Why 10%?  Why not?  God thought it made sense for tithing.  Why not for us?

We've got to bite the bullet.  We're like the chronic smoker or drinker or eater that feels the pains, knows the facts, but keeps on smoking, drinking and eating.  That person will die - horribly.  

For my kids, your kids, and their kids, let's jump on this NOW.  Each day that passes is another 100 feet deeper we're digging into the hole.  Let's stop digging and start climbing out.

God bless America.  Land that I love.