In a speech given today, President Obama stated that "we are not a deadbeat nation"...
But is that really true?
* Does a deadbeat not only knowingly spend more in a given year than brings in via income and other revenue sources, but equally knows this will continue for many years to come?
The US government spent more in 2012 than it brought in via tax revenue.. It knew full well 2013 would be the same and knows full well, this will not change in 2014 and beyond.
The last time the US government got its house in true financial order was 1845 when we fully paid off the bankers 100%. on our debt, not simply the deficit. The loans originated in the 1780s, so it took the US 65 years in a growing, expanding economy. We started borrowing heavily again 15 years later when the Civil War took place..
Currently we owe creditors $16.4 trillion with a big debt ceiling fight coming up by late February and amid a continuing recession. The media can call it what it wishes.. If something looks like garbage and tastes like it, then don't call it filet mignon..
The more successful the wealthy are in avoiding meaningful tax increases Especially on stock dividends, and the longer politicians compromise to allow this, the longer out budgets will not be balanced.
Generally, there's only three groups the government can get tax revenue-- the poor, the middle class and the wealthy. Squeezing more revenue from the poor is like getting blood from a stone and what little they do have in possessions is mostly due to available credit, not actual 'wealth' to be taxed.
The middle class has money but all politicians court the middle class vote election upon election promising them, lower' this' and free 'that' while the state and local governments end up killing them on the property and school taxes, which are meant to recoup the dried up revenue originally from Washington.
So who's left-- the wealthy. They say they create jobs -- a lie. In totality more Americans work for small to medium sized businesses than corporations or government. Those people are not 'wealthy' in the true sense-- they aren't multi millionaires and billionaires. The super wealthy benefit greatly from a system to which they wish to give very little back..
And we allow them to get away with it
The #1 reason the Federal Reserve lowered interest rates to near nothing was because it lowers what we as a nation have to pay back our creditors. The devaluation of our currency also allows the Fed to step in and be the #1 purchaser of US debt, whereas the Chinese used to be.
Simple example: US owes China $$ at 5% interest.. When interest is lowered to 0.1%, they get less interest back on payments and it allows Treasury to buy new public debt at fraction of price. The government takes this fresh money and pays China on older, pre-existing debts.
The national debt doesn't lower.. only shifting the burden from abroad to domestic, much like using a Visa to pay a MasterCard..
For all the talk in Washington about making necessary cuts to get their annual budgets balanced, Republicans only want to cut social services which they use the negative connotation of "Entitle-ments" At the same time they wish to Increase the military budget. Democrats who are true-blue (and not political sell-outs) wish the opposite.
There's actually ways you can increase the budget in needed areas to improve the US and in the process increase tax revenue. The biggest way is to set up large infrastructure projects to fix up our highways, bridges and other areas of transport that may be in serious need of attention.
The reduction in military spending i.e. less soldiers receiving a paycheck means when they return home, the skills they've been using and wasting to rebuild nations thousands of miles away whose people do not appreciate it, would be used domestically for a populace who would.
The US is a deadbeat nation.
But to be fair, so is every other nation on the face of the earth including China-- all nations are beholden to banks and more importantly Investors for their survival which is why all policy is catered to them and the 'precious' global markets.
We're all one big Deadbeat Club