TeeJaw Blog

The Debt Ceiling Issue Marks a Crossroad for the American People — Which Way?

Posted in Government and Politics by TeeJaw on Monday, July 18, 2011, 9: 05 AM

The crossing marks two divergent roads, one to remain a free country the other to become a big-government country. It’s one or the other for no big-government country is a free country.

Sober words from Michael Barone:

The bedrock issue is whether we should have a larger and more expensive federal government. Over many years federal spending has averaged about 20 percent of gross domestic product.

The Obama Democrats have raised that to 24 or 25 percent. And the president’s budget projects that that percentage will stay the same or increase far into the future.

In the process the national debt as a percentage of gross domestic product has increased from a manageable 40 percent in 2008 to 62 percent this year and an estimated 72 percent in 2012. And it’s headed to the 90 percent level that economists Kenneth Rogoff and Carmen Reinhart have identified as the danger point, when governments face fiscal collapse.

This is a level of spending as a share of the economy Americans haven’t seen since World War II. It seems more like Europe than like the America we have known.

It has never been possible for the Federal Government to collect more that about 19% of GDP in Federal taxes so a permanent plan of government spending 25% or more of GDP will doomed the U.S. to insolvency and bankruptcy.

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