One thing that I have always been interested in is the page in the instructions for your income tax form that tells you where the money comes from and where the money goes. I use the instructions for the 1040EZ here (pdf warning) and all you have to do is look at page 37 to see what I mean.
According to this page, the government, for fiscal year 2009, took in $2.105 trillion in taxes, with personal income taxes equaling 26% (or about $547 billion) of that. We spent $3.518 trillion, meaning that we borrowed $1.413 trillion. We borrowed three times what we collected through income taxes. This tells me that taxes have nothing to do with revenue. After all, if we can borrow $1.4 trillion, why can’t we borrow $1.9 trillion and simply eliminate income taxes altogether?
This is irresponsible spending at its worst. The Democrats think that the answer is to tax the income of the rich is the answer. However, according to the IRS (excel file- 2005 numbers) the top five percent of income filers made slightly less than $145 thousand per year. That means that the top 5% of earners make a combined total of $2.6 trillion per year. Even if we established an income cap of $50,000 a year, and confiscated every dime that everyone in this country made over that amount, we would not be able to pay for the government we have now.
The Republicans think that the way to fix this is to cut spending. The size if the cuts that are needed is incredible. A 40% across the board cut is needed to balance the budget. The problem is that we cannot cut the interest that we pay on our debt. Our elderly will not sit still for any medicare or Social Security cuts, but those programs account for over a third of our spending. If we leave them alone, we need to cut Defense, welfare, prisons, and every other expense by 60%. Any politician who suggests the cuts that are needed will find his or her political career cut short.
We owe more money than currently exists. There is no way that we can pay it back, no way that we can stop borrowing, and no way out, except default. The system is broken, and we lack the will to fix it. We will soon lack the ability. Soon, the decision will be made for us. People will refuse to lend us money, and the people will become restless. The government, and the political masters who run it, will become increasingly desperate to maintain their power, and dictatorship will be the inevitable result. In my opinion, we are past the point of no return. We are witnessing history, the fall of the mightiest empire the world has ever known. I wonder if a thousand years from now if we will be studied like the Roman empires, or largely forgotten like the Achaemenid?