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The last time the U.S. national debt exceeded the value of our entire annual output, it was due to the cost of fighting World War II.
When World War II ended, in less than four years of American participation, we began paying down the national debt. But our current national debt has been expanding by leaps and bounds in peacetime— and with no sign of an end in sight for the next decade.
Since more than 40 percent of our national debt is owed to foreigners, this means that goods and services produced by Americans, equal in value to more than 40 percent of our current output, will have to be sent overseas, free of charge, by either this generation or the generations that follow.
Since the generations that follow cannot vote today, the Obama administration’s latest budget keeps the spending increasing, while regaling us with wonderful plans for big reductions in government spending— years from now, after Obama is gone.
Make no mistake about it, spending wins votes, and votes are the ultimate bottom line for politicians. If fancy words and lofty visions are enough to get the voters to go along with more spending, then expect to hear a lot of fancy words and lofty visions.
One of the most successful political ploys is to promise people things without having the money to pay for them. Then, when others want to cut back on the things that have been promised, blame them for lacking the compassion of those who wrote the checks without enough money in the bank to cover them.
If all else fails, politicians can always say that we can pay for the things they promised us by raising taxes on “the rich.” However, history shows that, when tax rates go up to very high levels, people put more of their money in tax shelters, so the government ends up collecting less revenue than before.
But history is so yesterday. What is far more exciting is to think of high-speed rail in the future, even if it is speeding us toward bankruptcy.
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