National Debt: We're In Trouble, Guys

Okay, Democrats, you got your new entitlement program passed. Now would you kindly turn your attention to our debt crisis? Greece went under when its spending hit 100% of GDP. That's generally considered the tipping point of national solvency, and it's a point we're on the verge of reaching... and will far exceed in the next two or three years.

So, we're a larger, richer, and more stable nation than Greece, which means our "tipping point" will likely be higher, but the point is that we're entering dangerous territory, here. Moody's has already issued warnings that the US bond rating will be downgraded if we don't take steps to reign in the rapidly exploding national debt. Such a move would be a major sign of a nation on the verge of bankruptcy from too much spending...

The Democrats have responded to this situation by adding another entitlement program to our government (health insurance), even though it is the rising cost of entitlement programs that have gotten us to this point.

Our debt problem is likely to get worse as interest rates start to rise again... which will eventually happen. As rates rise, so will the amount of money we have to pay on our debt, which will in turn increase our deficit, thus increasing the national debt. This is a vicious cycle, and it's a bad one to be caught in.


The only way to reduce the debt is to stop spending more money than we have... eliminate the deficit and turn it into a surplus, which is used to pay down the remaining debt.

There are TWO ways to balance a budget: either curtail spending or increase revenue, i.e. increase taxes.

The vast majority of our yearly expenditures come from entitlement programs, which the Democrats have just expanded and are therefore unlikely to support cutting. That leaves tax increases.

We are already hearing strong rumbles about a national VAT (Value Added Tax) being levied in order to balance the budget. If the rate is set high enough, it might just work... for a while, that is, though the economic repercussions would be severe. But this method doesn't solve the problem, it merely POSTPONES it.

Raising taxes doesn't solve the underlying problem, because as spending increases because of rising interest rates and increased entitlement spending, eventually MORE tax increases will be necessary to keep things in balance.

The only long-term, viable solution is to get spending under control. Without limits on spending, tax increases will do little more than slow down our collapse... and make it far worse than what it would be like today.

America today is like the Dodo trying to get out of a hole by digging deeper. The first thing we must do is stop digging. Without spending controls, America keeps digging herself deeper into debt.

And remember what happened to the dodo...