End America’s Fiscal Incompetence
- 1 November 2012 by Author 1 Comments
End America’s Fiscal Incompetence
By Richard Larsen
Published – Idaho State Journal, 10/28/12
As we head into the final stretch on the presidential campaign, the ultimate decision on who leads the nation into the future comes down to a few core issues for the most part. Even though the outcome of the race is beyond our influence, we must, as Americans who share a love for this republic, make a choice on whether a continuation “Forward” of the past four years or a different, more fiscally responsible course, will ensure the perpetuity of the country.
With a $15 trillion economy and $16 trillion in federal debt, the United States is currently at 107% debt to GDP. Much of our debt has been funded the past three years by Quantitative Easing, with the Federal Reserve having printed over $3 trillion of new bills to increase circulation in M1 and incestuously buying our debt with that new currency.
Those factors, combined with four consecutive years of an average $1.44 trillion in deficit spending, have given us an economy, and a currency, that’s nearing an implosion stage. David M. Walker, former Comptroller General under President Clinton says at our current trajectory, the entire economy and currency will collapse in 2-3 years.
An important point must be made as it relates to the deficit. Many people have erroneously and fallaciously blamed George Bush for the deficits we now have because the two fronts on the war on terror, Iraq and Afghanistan, were “off budget.” Yes they were “off budget,” meaning they were not included in the president’s or congress’ budget figures, but they were not off balance sheet. The cost of those conflicts was, by law, included in the total debt and total deficit figures each year.
To put the “off budget” concept into perspective, the massive spending of the past six years has all been off budget. Nancy Pelosi never passed a budget in the four years she was Speaker of the House, and it’s been three years since the senate passed a budget. The end result is that over $8 trillion in spending over the past six years has all been “off budget,” but still included in the OMB (Office of Management and Budget) total expenditures for each of those years.
Economists are unanimous in their concerns for the “Taxmaggeddon” scenario we face at the beginning of 2013 when the tax cuts implemented in 2001 and 2003, and the adjustments from 2005, are set to expire on Dec. 31, 2012. This amounts to an automatic tax increase of over $600 billion that will impact everyone, in every bracket. Two years ago Obama said allowing expiration of those tax cuts was unfeasible until the economy improved. Well, two years ago we had GDP growth rate of 3.5%. We’re now at 1.3%. The case is even stronger now that none of those tax increases should be allowed, as they will most assuredly push the nation into another recession.
We also have a sequestration crisis facing the nation at the end of the year. This act has already imposed $45 billion in cuts to defense, will immediately cut another $60 billion, and will automatically impose over half-a-trillion in mandatory cuts to the military over the next several years if not acted on. Obama promised in the debate the other night that this will not happen, but he also promised us four years ago that he would cut the deficit in half. His “promises” ring hollow.
The logical question is who is most likely to remedy these crises? Certainly not the one who created the debt crisis. Remember, we were still at 58.6% debt to GDP at the beginning of his term, while now we’re at 107%. Certainly not the one who refuses even to meet with opposition party leadership, submitted such unreasonable budgets that they were unanimously rejected by congress, and ignored his Simpson-Bowles commission’s report to reduce the deficit.
The one who obviously has an ability to solve these critical fiscal crises is the one who turned a state’s $3 billion deficit into a $1 billion surplus, without raising taxes, all with a legislature that was comprised 87% by the opposition party. Mitt Romney is the one who has proven he can realistically “reach across the aisle” and work out solutions to our financial plight.
Couple this with the fact that the despotic world leaders who hold greatest contempt for America have expressed their support for our sitting president. What does that tell you when Hugo Chavez, Raul Castro, and Vladimir Putin have all endorsed Obama? Mahmoud Ahmadinejad did four years ago and has not recanted.
Logic should dictate that the one who created our current mess and has already proven his fiscal ineptitude, shouldn’t be trusted or expected to do anything different given another four years. The president has validated the Peter Principle, that all people rise to the level of their incompetence, and now it’s time for a change.
AP award winning columnist Richard Larsen is President of Larsen Financial, a brokerage and financial planning firm in Pocatello, and is a graduate of Idaho State University with a BA in Political Science and History and former member of the Idaho State Journal Editorial Board. He can be reached at firstname.lastname@example.org.