The US government says it ran a $US587 billion budget deficit for the fiscal year, which was a 34% increase over last year. Yes, with the aide of accounting gimmicks we have not had a rise in the deficit for a few years but a 34% jump in one year? Ouch. Government spending increased by almost 5% reaching $US3.9 trillion in fiscal 2016, while revenues grew at only 1% to $US3.3 trillion. The congressional budget office has projected the deficit to continue to grow. These latest figures show that the government is actually borrowing 15 cents of every dollar it spends. We do not have an income problem here, we have a spending problem. Deficits have become part of life for our government. Lawmakers see no problem with borrowing more each year when they have absolutely no intention of ever paying anything off. (Politicians’ mantra is spend today because tomorrow we will be out of office.) Deficits have become an intractable part of government while nobody bothers to address it.
Sooner or later uncle Sam will need more money. He will either be borrowing more, if he can, or he will be looking for new sources of income. Where is the new income going to be found? The problem is, onerous taxation actually destroys wealth and hurts the government even more. The further taxes are raised, the greater the decline in disposable income, and hence it produces deflation even as the quantity of money rises.
A few questions to consider:
1) Where will the government get the money it needs to make good on it promises? From the printing press or from those who have money?
2) Do you realize the federal debt is approaching $20,000,000,000,000?
3) American have nearly $19,000,000,000,000 in retirement savings. Could those savings be a source of much need money?
4) How much of your hard earned money do you want to contribute to paying off the national debt?
5) If you could shelter you money from the coming desperate grab for money when would you want to protect it?