May 25, 2019

Tax and Spend Insanity?

I had to laugh when I watched the current “tax reform” bill pass the House of Representatives for the second time. Only in our beloved Congress could we pass a tax bill somewhere in the amount of $1.5 trillion dollars in deficit spending over the next ten years and with the government (1) not only operating without a balanced budget but (2) with 12 appropriation bills still not voted on and with the government running out of money in a few weeks. This is ludicrous! This is insane!

Irrespective of what the bill contains and irrespective of whom it benefits, how can we move ahead with any reduction in revenue? We have, on the books, right now a situation where we are continuing to spend more than we take in. Every budget going forward has the potential to be over half a trillion dollars short.

I applaud growth but it is a gamble to state that as a result of the tax cut or tax reform or whatever we want to call it, we will be taking in enough revenue to pay for just a portion of the tax loss. We are gambling that our economy will grow enough jobs to pay the government sufficient taxes to offset the reduction in revenue. It has not worked in the past and will not work in the future. That is not to say that jobs will not be created, but we would have to realize unprecedented growth to cover the cost of the revenue loss.

As our entitlement programs also grow, where is the money going to come from to pay for the increased costs? Medicare is operating in the red and social security is on a collision course to pay less and less to the people paying into it in just a few short years. Medicaid is a welfare program supported by nothing.

I think America just made a mistake that will come back to haunt our country in just a few more years. I am glad that some people’s paychecks may go up but this increase in take home pay is being paid for, not with taxes, but with future debt. I had to laugh also that the Democrats are now worried about the deficit. Just a few short months ago, President Obama, a Democratic president, left office after having driven up the National Debt by $8 trillion dollars during his two terms in office. Where were these concerned Democrats then?

Only in America could such an unbelievable scenario occur. Our Congress has just rewritten a chapter in Economics 101 with a massive unsustainable debt. Watch for staggering increases in the interest on this National Debt something that will also reduce the potential funds for our government going forward in their “unbalanced budget.”

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Written by
Donald Wittmer

DONALD WITTMER is a retired business executive who held key roles in the automotive and banking sectors. For a time, he also served as a Fiscal Agency Manager for the Detroit branch of the Federal Reserve Bank of Chicago. He received his undergraduate degree from Cincinnati's Xavier University, an M.A. in business management from Central Michigan University, and earned certification in bank operations from the School of Banking at the University of Wisconsin-Madison. A husband, father, and grandfather, he teaches part-time at the Kent Place School for Girls in Summit, New Jersey.

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Written by Donald Wittmer