Yesterday the national debt has exceeded $16 Trillion! The debt is now at 104% of GDP - the highest it has ever been in fifty years. 65% of the debt has been accumulated during the Bush-Obama presidency.
There are few solutions at this point that the public would be willing to swallow. Politicians must consider the following:
- Increasing taxes. Between federal income taxes, federal FICA taxes, state income taxes, and local property taxes many New Jersey residents pay close to 40% of their income in taxes. This doesn't include the increased cost of goods due to taxation or the special taxes we pay on gasoline, tobacco, sugar, and many other items. Can we really afford more taxes? Raising the taxes on just the rich won't solve the problem either. Raising corporate income taxes won't help, and will actually hurt our ability to compete in the marketplace. In the end, its the consumer who ends up paying for higher corporate taxation.
- Inflating the money supply. The fed could buy up treasury securities with money created out of thin air, causing the value of our money to drop. Are you saving for a rainy day or for retirement? The federal government has a long history of inflating the money supply causing the value of your investments to drop. This option wil cause many Americans to continue to have to work into their old age.
- Cutting spending across the board. Military spending should be drastically cut - while still maintaining security. However military spending alone is not enough, we need to consider the huge entitlement spending that our children are being saddled with.
If we want to avoid defaulting on our existing obligations and debts, yet still remain a wealthy nation where opportunity and business thrives, the only option is to cut our spending now. Raising taxes or further inflating the money supply would be tantamount to economic suicide.
Unfortunately, the Democrats and Republicans in congress will continue to avoid making hard choice and will most likely raise the debt ceiling again. They will continue their reckless spending and destroy the future of our country.