Where Does All The Money Go?

Since it appears that we are all stuck paying taxes for the
foreseeable future, wouldn't you like to have a say in where
your money is spent?

I mean, after all, it is our money. It is supposed to be our
government. Why is it that the government believes that they
know what is best for us? Do you believe that? I don't.

Here is what bothers me. For the last several decades the U.S.
has taken on the job of global policeman. We dash here and
there quelling wars, deposing despots, and bringing democracy to
the masses. At least that is what we are told.

Ask any of our global neighbors and you will hear a different
story. The story of the big bad empire stretching its tentacles
further and further into the periphery, sucking resources out of
the planet like a giant leech.

Let me pause for a moment to remind you of a time not so long
ago where a similar empire was living off of the fat of the
world. Rome had pretty well taken over most of the known world
and as ruler; they demanded that farmers and artisans send their
goods to Rome so that the enlightened few could enjoy life and
liberty.

You see, if you were a Roman citizen, and you lived in Rome,
you were entitled to the fat of the land. It was history's
first major experiment in entitlement. What happened?

The farmer and businessmen that lived in the periphery simply
got tired of the high taxation and simply walked off the job.
They grew weary of working their fingers to the bone to support
the lazy ruling class. The empire collapsed.

There will come a day when the citizens of the world turn off
the spigots and let us fend for ourselves. Then we will have to
learn how to take care of ourselves.

That is why I want a say in where my taxes are spent. I did a
little research this morning. Our government spends about 51%
of the federal budget on defense related spending. $1,228
billion to be exact. That compares with the official budget
percentage of only 21%. Check here for the numbers.
http://www.warresisters.org/piechart.htm

Now, let's look at how we spend our money here at home. The
most recent national disaster was Katrina. The federal
government set aside a whopping $110 billion, less than 10% of
what we spend on war and killing. (I prefer to call defense-
spending war spending because we are currently not under attack,
but we are on the offensive.) And if you refer me back to 9-11
I will be happy to point out that if we were not so involved in
the affairs of other nations around the world, 9-11 would have
never happened. In fact, it appears that our intelligence
agencies knew something was up, but the powers that be let it
happen, just like Pearl Harbor, to arouse the emotions of the
people. But that is a story for another day.

I would much rather that we as a nation had spent our money on
the Katrina disaster than the war in Iraq and Afghanistan.
Imagine what $1,228 billion would have done for the people in
that part of the country. We could have taken care of our own
for a change. Imagine how the world would look at the U.S. if
instead of warmongering, we were taking care of the people of
our country. We would truly be viewed as world leaders.
Leaders in peace.

The Coming Entitlement Meltdown

Today, a very important article from Congressman Ron Paul, probably one of the few decent congressmen left in this country. This article is important to everyone who thinks that the government is going to provide for future retirees.

The Coming Entitlement Meltdown

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“When it comes to Social Security and Medicare, the federal government simply won’t be able to keep its promises in the future. That is the reality every American should get used to, despite the grand promises of Washington reformers.”

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by Hon. Ron Paul of Texas

David Walker, Comptroller General at the Government Accountability Office, appeared on the show “60 Minutes” last evening to discuss the federal budget outlook. If you saw the show, you know that he painted a very sobering picture regarding the federal government’s ability to meet its future obligations.

If you didn’t see the show, Mr. Walker’s theme was simple: government entitlement spending is like a runaway freight train headed straight at American taxpayers. He singled out the Medicare prescription drug bill, passed by Congress at the end of 2003, as “probably the most fiscally irresponsible piece of legislation since the 1960s.”

When it comes to Social Security and Medicare, the federal government simply won’t be able to keep its promises in the future. That is the reality every American should get used to, despite the grand promises of Washington reformers. Our entitlement system can’t be reformed- it’s too late. And the Medicare prescription drug bill is the final nail in the coffin.

The financial impact of the drug bill cannot be overstated. Government projections that the program would cost $400 billion over the next decade were a joke, as everyone in Congress knew even as they voted for the bill. The real cost will be at least $1 trillion in the first decade alone, and much more in following decades as the American population grows older.

The Medicare “trust fund” is already badly in the red, and the only solution will be a dramatic increase in payroll taxes for younger workers. The National Taxpayers Union reports that Medicare will consume nearly 40% of the nation’s GDP after several decades because of the new drug benefit. That’s not 40% of federal revenues, or 40% of federal spending, but rather 40 % of the nation’s entire private sector output!

The politicians who get reelected by passing such incredibly shortsighted legislation will never have to answer to future generations saddled with huge federal deficits. Those generations are the real victims, as they cannot object to the debts being incurred today in their names.

The official national debt figure, now approaching $9 trillion, reflects only what the federal government owes in current debts on money already borrowed. It does not reflect what the federal government has promised to pay millions of Americans in entitlement benefits down the road. Those future obligations put our real debt figure at roughly fifty trillion dollars- a staggering sum that is about as large as the total household net worth of the entire United States. Your share of this fifty trillion amounts to about $175,000.

Don’t believe for a second that we can grow our way out of the problem through a prosperous economy that yields higher future tax revenues. If present trends continue, by 2040 the entire federal budget will be consumed by Social Security and Medicare alone. The only options for balancing the budget would be cutting total federal spending by about 60%, or doubling federal taxes. To close the long-term entitlement gap, the U.S. economy would have to grow by double digits every year for the next 75 years.

The answer to these critical financial realities is simple, but not easy: We must rethink the very role of government in our society. Anything less, any tinkering or “reform,” won’t cut it. A good start would be for Congress to repeal the Medicare prescription drug bill.

[Ed. Note: Congressman Ron Paul of Texas enjoys a national reputation as the premier advocate for liberty in politics today. Dr. Paul is the leading spokesman in Washington for limited constitutional government, low taxes, free markets, and a return to sound monetary policies based on commodity-backed currency. He is known among both his colleagues in Congress and his constituents for his consistent voting record in the House of Representatives: Dr. Paul never votes for legislation unless the proposed measure is expressly authorized by the Constitution. In the words of former Treasury Secretary William Simon, Dr. Paul is the “one exception to the Gang of 535” on Capitol Hill.

To learn more about Dr. Paul, see here:

Congressman Ron Paul

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