No ifs, ands, or buts, this year’s presidential election is critical to say the least. If anyone is happy with our current economic and political climate in this country, by all means vote for Barack Obama again. I just don’t think many people are happy with our current state of affairs. Remember we lost our prized AAA credit rating from the rating agency Standard & Poors back in August of last year. The move by S&P reflected their negative outlook on the government’s budget deficit and rising debt burden. If we continue on the path we are on, the government’s tax receipts, the vast majority of their revenue, will be entirely devoted to servicing interest on the government’s debt. Individual income taxes and payroll taxes accounted for 82% of the Federal Government’s revenues in 2010, while corporate taxes accounted for another 9%. Altogether the government collected $2.2 Trillion in 2010. Could you imagine a figure similar to that going all to interest payments on our government’s debt burden?
This is similar to an individual paying the minimum balance on their credit card. It would take forever to pay down the principal with the minimum payments. At the current pace of government spending and budget deficits this is where we’re heading.
The Review and Outlook section of the WSJ today paints a pretty dismal picture of our current President’s fiscal record as “the worst in modern American History.” Here’s some quick stuff on Obama’s four years:
- He will have presided over the four highest spending years since 1946
- Four years in a row of budget deficits above $1.29 trillion. That has never ever happened !
- Government revenues at lows due to a lackluster “recovery” and temporary tax cuts that really don’t stimulate economic growth. White House Budget Office estimates revenues below 16% of GDP for the fourth year in a row. Last time they were below 16% for any year was 1950.
- $5 trillion in debt has been added just during President Obama’s term.
- He wants to raise tax rates on anyone making more than $200,000 as an individual and $250,000 as a couple. This would impact small businesses in a big way. A small business is defined as having fewer than 500 employees, and guess what? Small businesses represent about 99.7% of all employer firms, employ about half of all private sector workers in the US, and were responsible for 65% of the net new jobs created between 1993 and 2009.
Bottom line is, we all have to do our homework in selecting the right candidate for the next term, because I’m not lying when I say, our future depends on it. Never before has this been more true !