It is being reported that the federal budget deficit for this year will top $1.6 Trillion and will be upwards of $9 Trillion in the next ten years (http://www.bloomberg.com/apps/news?pid=20601068&sid=amFOw06qxb.o). These are astoundingly huge numbers and are difficult to even comprehend.
The budget deficit describes the difference between the amount that is being collected in taxes and the amount that is being spent by Congress. What we have with these deficit projections is record spending with the check being picked up (eventually) by our children, grandchildren, nieces, and nephews. To put things in perspective, imagine you decided to go on a spending binge, buying everything your heart desired regardless of cost, with the catch being that all of your debt would be paid by your future heirs. Would you be comfortable doing this to your children? I don't think any responsible individual would, but that is exactly what Nancy Pelosi, Brian Baird, and other liberal progressives in Congress are doing.
To be fair, President Obama did inherit a deficit of $482 billion -- $170 billion of this is the direct result of the first "stimulus" that was passed (Obama voted for it while in the Senate). As a result, in eight short months, liberals have expanded the deficit nearly five fold. Over this same period, unemployment has risen from approximately 5% to 9.4% with projections that it will be double-digits early next year. To compound the situation, the Democrat-controlled Congress has passed a tax increase, the House has passed the so-called Cap and Trade legislation that will hamper economic growth, and now they are considering adding $2 Trillion to the deficit by taking over health care. I don't know about you, but I sometimes feel like I live in bizarro world where up is down and spending more money is actually viewed as "controlling costs".
As a financial advisor, I constantly work with clients to determine how best to manage their money and plan for their future. If a client comes to me with a debt level that is unsustainable, we first look at ways to reduce the debt. If that same client went to this government, they would be told to spend more. Our government is making decisions that will have a detrimental affect on our future, and that of future generations of Americans. However, as Americans we have a say in our destiny and that means we still have the ability to build a bright future.
First, we need to renew the call for a balanced budget amendment. Every state and local government in the nation must balance their budgets, there is no reason why the federal government should not do the same. One of the remarkable things about passing a Balanced Budget Amendment to the Constitution would be that every state in the union would be debating the merits, and the decision would ultimately rest in the hands of "we the people" in individual states.
Second, John F. Kennedy was profound when he said "Lower rates of taxation will stimulate economic activity and so raise the levels of personal and corporate income as to yield within a few years an increased – not a reduced – flow of revenues to the federal government." It has been proven time and time again that a reduction in the marginal tax rates stimulate economic growth - Kennedy proved it, Reagan proved it, George W. Bush proved it, and Democrats in Congress owe it to the American people to do it.
Third, we must reduce or eliminate the capital gains tax. Again, history is on the side of tax cutters. Revenues to the government have increased when the capital gains tax was reduced (http://www.nationalreview.com/balance/balance050101.shtml). Moreover, the complete elimination of capital gains taxes would spur investment, job growth, and research by giving business owners, executives, and individual investors more capital to inject into the economy, expand businesses, and invest in new equipment and technology.
Finally, the Congress should seriously explore putting a cap on spending (e.g. the rate of core inflation (http://www.investopedia.com/terms/c/coreinflation.asp) plus population growth). As economist Stephen Moore has pointed out "a cap would reduce aggregate outlays through 2019 by $750 billion and by 2030 by $3 trillion" (source: WSJ 8/6/09). Furthermore, it would force Congress to end the practice of earmarks and would require our leaders to make the tough decisions that we send them to Congress to make.
We live in challenging and remarkable times. We are not, however, facing insurmountable problems. The American people (not our government) have shown the way to prosperity in the past and the same holds true for our future. I am looking forward to being a new voice for you in Washington, DC. Someone who upholds the values of individual liberty, responsibility, and self-reliance -- values that this country was founded on.
It is time for Congress to hear our one, strong voice. Join me as I fight to ensure that all of our voices our heard. www.castilloforcongress.com/donate.asp