Although we are currently $15 trillion in debt, the forecast of our economic future is bleak. Recently, a report was published that looked at the future liabilities to future revenue to be $222 trillion:
The U.S. fiscal gap, calculated (by us) using the Congressional Budget Office’s realistic long-term budget forecast -- the Alternative Fiscal Scenario -- is now $222 trillion. Last year, it was $211 trillion. The $11 trillion difference -- this year’s true federal deficit -- is 10 times larger than the official deficit and roughly as large as the entire stock of official debt in public hands.This fantastic and dangerous growth in the fiscal gap is not new. In 2003 and 2004, the economists Alan Auerbach and William Gale extended the CBO’s short-term forecast and measured fiscal gaps of $60 trillion and $86 trillion, respectively. In 2007, the first year the CBO produced the Alternative Fiscal Scenario, the gap, by our reckoning, stood at $175 trillion. By 2009, when the CBO began reporting the AFS annually, the gap was $184 trillion. In 2010, it was $202 trillion, followed by $211 trillion in 2011 and $222 trillion in 2012.
The ultimate issue of this election and beyond is the question of how mature are we going to be about the economy. Are we going to take the economy seriously and handle these issues like adults or are we going to be immature about it? Adults deal with serious issues in a mature way and take a long term perspective in dealing with problems and has a willingness to make tough and painful decisions. Being immature means taking a short sighted view of the problem and only considering our wants at the present moment regardless of how it affects others.
Mitt Romney picking Paul Ryan as his running mate for 2012 is a call for a serious discussion about our nation's economy. More specifically, we need to have a serious discussion about our entitlement programs. Voters will be learning alot about Paul Ryan's “Roadmap” to prosperity plan which is a fabulous plan to reduce our national debt and reform our entitlement programs. Here's a brief synopsis of his plan:
1) It would spend $40.135 trillion over 10 years, compared with the $46.959 trillion the White House said its budget would spend over 10 years.2) It would bring in $37.008 trillion in tax revenue over 10 years, compared with $40.274 trillion in the White House plan.3) Lowers tax rates and cuts tax breaks. But the report doesn’t say which tax breaks would be targeted for new limits or elimination.4) Overturns the White House’s health care law and replaces it with changes. New Medicare rules would not go into effect for those already using the program or about to qualify for benefits. They would be able to use the existing program.5) On Medicare, it would give Americans a choice to enroll in a Medicare-type plan. The government would subsidize part of the payments for private-run insurance plans. Mr. Ryan believes this competition between firms “will help ensure guaranteed affordability.” For the poor or those with more health risks, Medicare would offer additional assistance.6) The Medicare piece is perhaps the biggest flashpoint in the entire plan. The White House and Democrats have said it would gut benefits for seniors, and even former Massachusetts Governor Mitt Romney has kept some distance from it.7) On Medicaid, the budget would turn it into a federal block grant program, “thus freeing states to tailor their Medicaid programs to the unique needs of their own populations.”8) The plan offers no details for changes to Social Security, other than calling on Congress and the White House to pursue modifications to it.9) On taxes, the plan calls for two individual income tax rates – 10% and 25%. It also proposes “clearing out the burdensome tangle of loopholes that distort economic activity,” but it doesn’t identify which ones should be cut.10) It calls for overhauling the corporate tax code by gutting exemptions and lowering the top corporate rate from 35% to 25%.11) The Ryan budget would reduce the deficit to just 3% of gross domestic product by fiscal year 2014, three years faster than the White House estimated its plan would reach that level. For comparison, the deficit is expected to be $1.2 trillion this year, 7.8% of GDP.12) The Ryan budget would not, at least according to its 10-year window, balance the budget, as tax revenue would always lag behind spending.
Although Romney certain parts of Ryan's plans, Mitt will offer his own proposals for Medicare which will be different in many ways from Paul Ryan's plan.
However, it appears that the public is not mature enough to handle the cuts required to maintain America's financial security. Furthermore, Americans want to keep their entitlement programs as they have it yet somehow reduce the debt. Americans want to have their cake and eat it as demonstrated in a recent poll showed that 78% of Americans oppose cutting spending on Medicare while another poll shows that 48% of Americans are willing to see Medicare spending cut to reduce debt. At the same time, people are loosing faith in programs such as Social Security.
We cannot have it both ways. It is clear that Americans are conflicted and inconsistent on what to do about entitlement programs. This election will require the voters to make up its mind in dealing with the entitlement programs that drive up our national debt.
It is an undeniable fact that entitlement programs are the single largest driver of our debt. The only solution to reducing our staggering debt is to reform these programs. If we do not fix this problem right now, it will be the beginning of the decline of our great country.
Democrats, liberals and progressives have absolutely zero interest in reforming our entitlement programs because they believe in redistribution of wealth despite the fact soaking the rich cannot sustain the way our government operates right now. They are in denial that social security is having problems. Instead, their solution is to preserve the entitlement programs as they are now and make deep cuts in other programs. This plan will not work because no matter how much you cut in other programs, the amount we spend in entitlement programs is larger than what we spend in other programs.
Democrats have already gone on the offensive by engaging in "Mediscare" attacks on Mitt Romney and Paul Ryan. Both men have already defended their position on reforming Medicare and other entitlement programs.
The effect of these Mediscare attacks on this election remains to be seen but the effects of these attacks isn't as important as what it reveals about the democratic party. The Democratic party wants to keep the public from acting like adults in addressing our nation's economic problems. That's why they have make complete lies about Republicans wanting to end Medicare in order to keep the voters from having the confidence to make the tough decisions that we need to make. Democrats know that a large majority of Americans are on these programs, that they are dependent on these programs even though some or most don't want to be but that due to the poor economy and that they get extra money, they don't want to let go of these benefits. They also know that if the voters can vote themselves to get benefits, they will vote for the party that will deliver it to them.
Obama and the Democratic party have not been responsible in managing the economy and they don't want you to keep them responsible for it. Unemployment is above 8%, our deficit is exploding, they have not passed a budget since Obama has been in office and the President hasn't meet with his economic advisors for a while now.
Unlike Obama, Mitt Romney and Paul Ryan recognize that Washington has a spending problem not a revenue problem and that despite attacks from the left, they and their fellow Republicans do have clear, actionable plans for balancing the budget and reducing the national debt.
Mitt Romney picking Paul Ryan as his running mate for 2012 is a call for a serious discussion about our nation's economy. That discussion starts with the American people looking introspectively and asking themselves if they are mature and adult enough in making the necessary cuts, reforms and changes to fix the problem. That also means accepting the the truth is that as much as Washington D.C. is the problem, we are also the problem if we cannot face these problems maturely. We get the government we deserve since our political leaders come from our communities to our nation's capital. Plato is to have said, “The states are as the men are. They grow out of human characters.”
As a result, the central question of the 2012 election will be: are we mature enough to make the tough choices ahead? If we are, then the mature choice in this election is to vote for Mitt Romney and Paul Ryan.
This article is cross posted from Conservative Samizdat.