The current Democrats didn’t start the federal government’s massive Ponzi scheme, but they aren’t doing anything to improve the situation. In fact, they’re only making things worse. Minnesota Governor Tim Pawlenty calls it the Ponzi scheme on the Potomac, and provides some common sense solutions to the dealing with our huge debt.
In a Ponzi scheme, organizers create the illusion of profit for early investors by siphoning money from later participants. It works until there is not enough income to pay the promised dividends, exposing the fraud and leaving everyone broke. That is essentially what the federal government is doing, as it continues to spend and promise far more than can ever be paid for by current and future revenues.
Last week, the U.S. Senate increased the nation’s debt ceiling by an additional $1.9 trillion. That vote was necessary to further the Ponzi scheme. It should serve as a wake-up call that this level of spending is unsustainable.
The debate is no longer between competing political philosophies — it is a matter of basic mathematics. Here is a sampling of the facts:
• Federal government spending has grown nearly seven times faster than median income since 1970, according to the U.S. Census Bureau and Office of Management and Budget.
• At more than $12 trillion, the federal debt is already more than 80 percent of the nation’s gross domestic product and growing fast.
• The federal government’s total debt, including unfunded liabilities, means about $600,000 of debt for every U.S. household.
Sooner or later, the federal government’s scheme will come crashing down, and the loss will be mammoth.
Scary, I know. This makes Bernie Madoff’s schemes look like child’s play.
That’s why we need an amendment to the U.S. Constitution to require a balanced budget with limited exceptions for war, natural disasters and other emergencies. Every state but one has a balanced budget requirement, and while such requirements make for difficult decisions, they work.
The president also should be given line-item veto authority power as a budget enforcement tool. The experience of the states shows that this is an effective way of preventing excessive spending.
Spending reduction tools alone will not meet this challenge. We must also grow the economy. To that end, Congress should reject federal legislation that places additional burdens on growth, such as the proposed health care overhaul, cap-and-trade bill, labor union card check and tax increases.
Instead, lawmakers should support policies that promote economic growth. For example, the Bush tax cuts should be made permanent and tax burdens on individuals and businesses should be further reduced. To better compete overseas, Congress should finally pass the pending free-trade agreements with South Korea and Colombia, and re-enact trade promotion authority. And we should pass health care reforms that would empower consumers to make smarter medical choices and lead to more competition and lower costs. …
That sounds good, but I don’t think the radical progressives controlling Washington, DC are listening.
Via memeorandum.
Update: Glenn Beck talked about the spending, Obama’s budget and the fundamental transformation of our economy earlier. Interesting. You can see the rest of the show at The Right Scoop.
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