This debt accumulation cannot go on forever. The best illustration of how bad it will become and how soon it will happen is shown by the following chart from the Cato organization. Keep in mind that according to the White House budget website and spreadsheet, Federal government tax revenues in 2017 from all sources is expected to be just under $3.755 TRILLION:
A few observations:
- According to chart, by 2017 the Federal government will spend just over $2 TRILLION just on these three government programs.
- This is a whopping 55% of the entire Federal tax stream.
- This leaves only 45% of the tax stream to pay for the rest of the current Federal government’s activities including military, transportation, housing, food stamps/assistance, education, border patrol, etc.
- But it gets worse. If we assume that the Federal government’s tax stream grows 3% a year, the long term growth in GDP, then by 2025 the Federal tax stream would be about $4.757 TRILLION.
- Cato estimates that by 2025 these three programs will pay out $3.337 TRILLION which will eat up a whopping 70% of the Federal government revenue stream.
- And this is probably a low ball estimate since the Washington political class has not shown the ability to grow the economy by at least three percent for at least the length of the Obama administration.
Of course, Washington will likely at some point say that higher taxes, rather than reduced spending and the eliminating of criminal fraud and waste, will resolve all of the problems illustrated above. The problem with that approach is two fold:
- The more Americans are taxed, the less they have to spend and grow the economy. As economic growth slows down as the tax burden increases, the Federal government tax stream starts to slow down or actually decrease, leaving us exactly where we were to start with.
- Second, increasing the tax burden decreases the amount of freedom that Americans deserve and desire. You cannot have political and real freedom without financial freedom and as the tax freedom day gets further and further out each year, that restriction on the amount of our earnings and wages we can keep further restricts the amount of everyday freedom we can enjoy.
- The state government is about to start enforcing existing regulations that require food stamp beneficiaries to work if they are able bodied to do so in order to stay in the program.
- This could affect upwards of 30,000 state residents who currently are able to work but don’t and still get food assistance every month.
- The work requirements were suspended as a result of the Great Recession but since Obama and other liberals state the economy is in fine shape, Pennsylvania is now starting to re-enforce the existing work requirements.
- These requirements mean that certain individuals will again be subject to a three-month limit on food assistance, after which they would be required to work, volunteer or attend a work-training program for a minimum 20 hours a week in order to maintain benefits.
- The requirements exclude anyone who is over age 50, who are disabled, or caring for minor children.
- The action will not be enforced evenly across the state since it will be more lenient in geographic areas that still struggling with higher unemployment.
- North Carolina is doing the same thing, starting in 2016, and is also being sensitive to high unemployment areas.
- In North Carolina, upwards of half of the state's food assistance recipients could be affected.
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