Earth to Obama: US Has a Spending Problem

Listening to the president the past four years, it's clear he views hiking taxes as the only way to grow government revenue and slice the yawning federal deficit.  Imagine his shock when he realized this month that tax receipts actually rose last fiscal year without an increase in federal income taxes.  

Even with those evil Bush-era cuts in force, tax revenues increased six per cent in fiscal 2012, which ended September 30.  Washington collected three percent more in personal taxes. Corporations coughed up an increase of 34 percent over fiscal 2011.

Despite the healthy growth in tax revenue, the nation recorded a $1.089 trillion deficit in 2012.  This marks four straight years of trillion dollar deficits.  To pay for the deficits, the United States is expected to bump up against the $16.39 trillion debt ceiling before the end of 2012.

The cumulative federal debt will likely reach 70 percent of the nation's gross domestic product (GDP) by the end of the year, according to this month's estimate from the Congressional Budget Office (CBO). That would be the highest level since World War II.  It was 40 percent when George W. Bush waved goodbye to Washington.

Without significant changes, the CBO warned that federal debt could hit 90 percent of GDP by 2022. If that sounds ominous, consider this: the financially distressed country of Spain is on pace to reach the 85.3 percent mark by the end of this year.

How did the United States arrive at this financial precipice?

In his first two years in office, President Obama boosted federal spending by 28 per cent.  His latest budget proposal for 2013 would tack on another $1 trillion in debt.  The administration's long-term forecast calls for a stunning 57 percent increase in government outlays by 2021.

Over the previous 50 years, spending has averaged 20.2 percent of the nation's Gross Domestic Product (GDP).  Last fiscal year, federal government expenditures topped 24 percent of GDP.

As a result of the spending binge, America is drowning in a ocean of red ink.  

Without a major policy shift, the U.S. is barreling toward a financial meltdown of epic scale.  If that sounds alarmist, just read the CBO report of August 22, chronicling the Mount Everest of debt that has accumulated since Barrack Obama vowed to "cut the deficit in half" during his first term.

"If current policies are continued, it would lead to a level of federal debt that would be unsustainable from both a budgetary and an economic perspective," the non-partisan CBO stated in its chilling review of federal deficits and spending.

President Obama's answer to spiraling deficits is escalating taxes. Obama has promised to raise the top tax rates for nearly every major federal tax.  That includes levies on capital gains, corporate dividends, death taxes as well as soaking high-earners with a 20 percent increase in personal tax rates.

Forcing Americans to give up more of their hard-earned income to Uncle Sam is not the answer. That will only kill the puny economic growth that Obama has presided over during his four years. Spending must be addressed if the nation is serious about curbing runaway deficits.

It is delusional and irresponsible to suggest otherwise.  Economic growth, not taxes, is the best way to increase federal revenues.  A booming economy, accompanied by spending cuts, would enable the government to address the cataclysmic deficits.    

Like so many things during the last four years, the same media that harped on the Bush era deficits has elected to treat the current financial crisis as mere political theatre.  It can't be Obama's fault. Yet the numbers do not lie.  America is in worse financial shape than at any time since World War II.

The nation is spending itself into ruin.   The country cannot afford four more years of Barrack Obama.