Tag Archives: national debt

Quotes on America by the Founders and other real Americans (Part 1)

In the past I have given you quote compliations from the left on everything from the environment to America. Below is a compilation of inspiring quotes from the founders and other patriots about our nation, liberty and our national values. They put the challenges and rewards of a free Republic into perspective. It is fascinating how many of these could have been written in the last year… 

“The time is near at hand which must determine whether Americans are to be free men or slaves” – George Washington  

“If you love wealth more than liberty, the tranquility of servitude better than the animating contest of freedom, depart from us in peace. We ask not your counsel nor your arms. Crouch down and lick the hand that feeds you. May your chains rest lightly upon you and may posterity forget that you were our countrymen”- Samuel Adams 

“A nation of well informed men who have been taught to know and prize the rights which God has given them cannot be enslaved. It is in the region of ignorance that tyranny begins” – Benjamin Franklin 

“We hold these truths to be self-evident: that all men are created equal; that they are endowed by their Creator with certain unalienable rights; that among these are life, liberty, and the pursuit of happiness”- Thomas Jefferson

 

On the role of government… 

“Governments are instituted among men, deriving their just powers from the consent of the governed”The Declaration of Independence 

“The way to have safe government is not to trust it all to the one, but to divide it among the many, distributing to everyone exactly the functions in which he is competent….To let the National Government be entrusted with the defense of the nation, and its foreign and federal relations….. The State Governments with the Civil Rights, Laws, Police and administration of what concerns the State generally. The Counties with the local concerns, and each ward direct the interests within itself. It is by dividing and subdividing these Republics from the great national one down through all its subordinations until it ends in the administration of everyman’s farm by himself, by placing under everyone what his own eye may superintend, that all will be done for the best.” – Thomas Jefferson 

“Our best protection against bigger government in Washington is better government in the states”  –  Dwight David Eisenhower  

“The Constitution of most of our states (and of the United States) assert that all power is inherent in the people; that they may exercise it by themselves; that it is their right and duty to be at all times armed and that they are entitled to freedom of person, freedom of religion, freedom of property, and freedom of press.” – Thomas Jefferson 

“The Constitution is not an instrument for the government to restrain the people, it is an instrument for the people to restrain the government — lest it come to dominate our lives and interests.”  Patrick Henry  

And warnings about government… 

“The natural progress of things is for liberty to yield and government to gain ground” – Thomas Jefferson  

“Arbitrary power is most easily established on the ruins of liberty abused to licentiousness” – George Washington

 

“With respect to the words general welfare, I have always regarded them as qualified by the detail of powers connected with them. To take them in a literal and unlimited sense would be a metamorphosis of the Constitution into a character which there is a host of proofs was not contemplated by its creators” – James Madison 

“Every step we take towards making the State our Caretaker of our lives, by that much we move toward making the State our Master”- Dwight D. Eisenhower 

On taxes… 

“For example. If the system be established on basis of Income, and his just proportion on that scale has been already drawn from every one, to step into the field of Consumption, and tax special articles in that, as broadcloth or homespun, wine or whiskey, a coach or a wagon, is doubly taxing the same article. For that portion of Income with which these articles are purchased, having already paid its tax as Income, to pay another tax on the thing it purchased, is paying twice for the same thing; it is an aggrievance on the citizens who use these articles in exoneration of those who do not, contrary to the most sacred of the duties of a government, to do equal and impartial justice to all its citizens” – Thomas Jefferson 

“The democracy will cease to exist when you take away from those who are willing to work and give to those who would not” – Thomas Jefferson 

“I hope a tax will be preferred [to a loan which threatens to saddle us with a perpetual debt], because it will awaken the attention of the people and make reformation and economy the principle of the next election. The frequent recurrence of this chastening operation can alone restrain the propensity of governments to enlarge expense beyond income” -Thomas Jefferson 

“In a general sense, all contributions imposed by the government upon individuals for the service of the state, are called taxes, by whatever name they may be known, whether by the name of tribute, tythe, tallage, impost, duty, gabel, custom, subsidy, aid, supply, excise, or other name” – Joseph Story

“An unlimited power to tax involves, necessarily, a power to destroy; because there is a limit beyond which no institution and no property can bear taxation” -John Marshall

“Considering the general tendency to multiply offices and dependencies and to increase expense to the ultimate term of burden which the citizen can bear, it behooves us to avail ourselves of every occasion which presents itself for taking off the surcharge; that it may never be seen here that, after leaving to labor the smallest portion of its earnings on which it can subsist, government shall itself consume the residue of what it was instituted to guard.” –Thomas Jefferson 

On public debt… 

“I place economy among the first and most important virtues, and public debt as the greatest of dangers to be feared. To preserve our independence, we must not let our rulers load us with perpetual debt. If we run into such debts, we must be taxed in our meat and drink, in our necessities and in our comforts, in our labor and in our amusements. If we can prevent the government from wasting the labor of the people, under the pretense of caring for them, they will be happy” – Thomas Jefferson 

“The principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale” -Thomas Jefferson 

“But with respect to future debt; would it not be wise and just for that nation to declare in the constitution they are forming that neither the legislature, nor the nation itself can validly contract more debt, than they may pay within their own age, or within the term of 19 years” -Thomas Jefferson

“The same prudence which in private life would forbid our paying our money for unexplained projects forbids it in the disposition of the public moneys.” –Thomas Jefferson 

On Redistribution of Wealth…. 

“To take from one because it is thought that his own industry and that of his father’s has acquired too much, in order to spare to others, who, or whose fathers have not exercised equal industry and skill, is to violate arbitrarily the first principle of association–the guarantee to every one of a free exercise of his industry and the fruits acquired by it” -Thomas Jefferson 

“Whoever claims the right to redistribute the wealth produced by others is claiming the right to treat human beings as chattel” – Ayn Rand 

“We need true tax reform that will at least make a start toward restoring for our children the American Dream that wealth is denied to no one, that each individual has the right to fly as high as his strength and ability will take him. . . . But we cannot have such reform while our tax policy is engineered by people who view the tax as a means of achieving changes in our social structure” – Ronald Reagan 

More warnings… 

“When a government controls both the economic power of individuals and the coercive power of the state … this violates a fundamental rule of happy living: Never let the people with all the money and the people with all the guns be the same people” – P.J. O’Rourke 

“These are the times that try men’s souls. The summer soldier and the sunshine patriot will, in this crisis, shrink from the service of their country; but he that stands it now, deserves the love and thanks of man and woman. Tyranny, like hell, is not easily conquered; yet we have this consolation with us, that the harder the conflict, the more glorious the triumph. What we obtain too cheap, we esteem too lightly: it is dearness only that gives every thing its value. Heaven knows how to put a proper price upon its goods; and it would be strange indeed if so celestial an article as freedom should not be highly rated” – Thomas Paine 

Take Heart America, the words of patriots past should inspire us to regain the promise of our great nation. We must… Restore the American Dream. We must return to our national values and reclaim our birthright. It is time to take back the unalienable rights granted us in the Declaration of Independence; Life, Liberty and the pursuit of Happiness. 

Restore the Republic, Reject the Agenda of the Progressive Left!

Update: The Tipping Point

In an effort to prove they are part of the mainstream media and are totally clueless about the national situation, Parade Magazine published the following story last Sunday (3/28/10). They also ran an online poll for Americans to respond to. Both were on the subject of our out of control spending and associated national debt. 

Just Sunday I wrote a post on the subject in an attempt to bring focus on the potential disastrous effects the debt could have on our struggling economy. Later I found this article and was blown away by the nonchalant attitude of the writer with regard to the magnitude of the problem. See Parade article below: 

Parade Magazine 3/28/10 – Rebecca Webber 

Does America Owe Too Much?

Critics of government spending are voicing alarm about the growing national debt. In January, the U.S. public debt was $7.5 trillion—about 53% of the country’s total economic output, also known as gross domestic product (GDP). By comparison, Japan’s debt-to-GDP ratio was 192% and Saudi Arabia’s was 20% in 2009, according to the latest figures available. Economists use the ratio of public debt to GDP as an indicator of a country’s economic health. So what do these numbers mean? Is America’s debt level dangerous?

The short answer is, “No, but it might be soon.” A recent study from the National Bureau of Economic Research found that public-debt levels become perilous when they reach 90% of GDP. By that point, interest rates may be higher as investors demand greater returns on federal bonds, while massive interest payments detract from key government functions. “The interest can get so burdensome that the country can’t afford to repair its highways or educate its children or provide other essential services,” says Isabel Sawhill of the Brookings Institution. “You become a much weaker nation.” According to the Congressional Budget Office, U.S. public debt could approach 100% of GDP by 2020, given current spending levels and obligations for entitlement programs like Medicare, Medicaid, and Social Security.

Debt Around the World
America‘s public debt is now 53% of GDP. Here’s how other countries stack up.

France 80% of GDP
Canada 72%
U.K. 69%
India 60%
China 18%

So seriously, the debt level is not dangerous yet – but will be soon? How bad is bad? America – it is time to do something besides worry… like STOP spending money we don’t have! Maybe if there were some still serious journalists working somewhere they would use the space to give this issue appropriate coverage. It really doesn’t make me feel better to see that we are in the same boat with France or India. 

They also included a link to a poll you could vote on. Here are the results of their on line poll: 

Parade Magazine Poll Results

Do you fear that our national debt will hurt our economy? 

Yes 93%

No 7%  

Thank God, Americans are smarter than the writer! 

To read my original post which includes several interesting charts and analysis of the national debt, go to:  The Tipping Point http://wp.me/pv8jP-jO 

If you would like to see the real time debt clock, go to:  US Debt & Population Clocks http://wp.me/Pv8jP-6z

Restore the Republic, Reject the Agenda of the Progressive Left!

Spender-in-Chief Seeks Debt Counseling

On Thursday, President Obama used an executive order to create a debt commission. The commission will be charged with “taking on the impossible” and designing a plan to reduce the federal deficit.  To lead the commission Obama chose former Sen. Alan Simpson, R-WY., and Democrat Erskine Bowles, former chief of staff to President Clinton. 

“They’re going to try to restore reason to the fiscal debate and come up with answers,” said Obama. “The politics of dealing with chronic deficits is fraught with hard choices. And therefore it’s treacherous to officeholders here in Washington.”  

White House spokesman Robert Gibbs said Obama’s executive order sets up a debt commission to study options on spending and taxes because the U.S. Congress failed to create a congressional deficit panel of its own. The presidential commission will make recommendations but lacks the power to bind Congress to them.

Obama also signed the bill to raise government borrowing authority to $14.3 trillion and reinstall pay-as-you-go rules to require Congress to offset spending with cuts, Gibbs said. The White House is forecasting a record $1.56 trillion deficit in the fiscal year that ends on Sept. 30, 2010.

Vital creditors such as China and other investors question whether the White House is serious about fiscal responsibility. Failure to convince them will have a significant impact on the dollar and bond markets. They want to see a plan to control the deficit and spending. Obama’s current budget forecast show the debt level reaching 80% of GDP by 2020. The federal deficit reached an unprecedented $1.4 trillion in 2009 and most predict it will go even higher this year. 

The commission will consist of 18 members, six will be presidential appointees; there will be 12 sitting lawmakers, 6 appointed by Republican congressional leaders and 6 appointed by Democratic congressional leaders. A 14 vote majority would be required to implement any recommendation. The recommendations are due Dec. 1. 

The Republicans are wary but plan to participate. Their fear is that solutions may aim toward increasing taxes instead of cutting spending. 

“Americans know our problem is not that we tax too little but that Washington spends too much — that should be the focus of this commission,” McConnell said. 

House Minority Leader John Boehner, R-Ohio, says the GOP has proposed immediate spending cuts through a rescissions package. If they aren’t considered a Boehner spokesman said “That doesn’t mean we won’t participate in this commission, but it does indicate that Washington Democrats aren’t serious yet about shutting down their spending binge.”  

Jerry Lewis, R-CA., is the most vocal critic of the panel. “Instead of acting appropriately to rein in spending and control skyrocketing deficits, the Democrat Congress and the President have outsourced their constitutional responsibilities to a powerless commission apparently created to provide political cover,” Lewis said. “The American people are demanding accountability from their elected officials,” he added. “This commission, which isn’t slated to produce anything until after the November elections, is essentially a way to avoid this accountability.” 

Lewis is dead on in his assessment. Fixing the deficit will be a complex task to be sure but it starts with common sense. The first way to reduce a spending deficit is to stop spending. The way to stimulate growth in the tax base is to help it grow. The proven way to do that is to cut taxes and stimulate investment. The math is simple – example: would you rather have 5% of $10,000,000 (500,000) or 7.5% of $5,000,000 (375,000). 

It is also difficult to take this idea seriously from an administration that does not mention that it has nearly quadrupled the deficit in a year. It is kind of like asking Tiger Woods for advice on marital fidelity. 

Americans need to watch this closely as it appears as Rep. Lewis has pointed out to be another distraction from the real job of reining in out of control government spending. This gives the President a new way to avoid accountability and set up scapegoats if his policy failures continue. 

Wake up, America! It is time to clean house in Washington and start over with common sense solutions that cut spending and promote fiscal responsibility. Keep speaking out and letting your representatives know we are not going to take it anymore. 

Restore the Republic, Reject the Agenda of the Progressive Left, End Big Government Now! 

“The principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale”. – Thomas Jefferson, letter to John Taylor, May 28, 1816

Even the N.Y.Times gets it… Spending is out of control!

Are we on the edge of financial disaster as a nation? Is the entire economy a house of cards? Has a recovery really begun? Whether you believe it has or not read the article below from the New York Times. Even given their normally liberal stance, it is clear that the growing deficit raises fear everywhere – even at the N.Y. Times! This is an excellent explanation of the problem.

NY Times – Wave of Debt Payments Facing U.S. Government

By EDMUND L. ANDREWS

Published: November 22, 2009

WASHINGTON — The United States government is financing its more than trillion-dollar-a-year borrowing with i.o.u.’s on terms that seem too good to be true.

But that happy situation, aided by ultralow interest rates, may not last much longer.

Treasury officials now face a trifecta of headaches: a mountain of new debt, a balloon of short-term borrowings that come due in the months ahead, and interest rates that are sure to climb back to normal as soon as the Federal Reserve decides that the emergency has passed.

Even as Treasury officials are racing to lock in today’s low rates by exchanging short-term borrowings for long-term bonds, the government faces a payment shock similar to those that sent legions of overstretched homeowners into default on their mortgages.

With the national debt now topping $12 trillion, the White House estimates that the government’s tab for servicing the debt will exceed $700 billion a year in 2019, up from $202 billion this year, even if annual budget deficits shrink drastically. Other forecasters say the figure could be much higher.

In concrete terms, an additional $500 billion a year in interest expense would total more than the combined federal budgets this year for education, energy, homeland security and the wars in Iraq and Afghanistan.

The potential for rapidly escalating interest payouts is just one of the wrenching challenges facing the United States after decades of living beyond its means.

The surge in borrowing over the last year or two is widely judged to have been a necessary response to the financial crisis and the deep recession, and there is still a raging debate over how aggressively to bring down deficits over the next few years. But there is little doubt that the United States’ long-term budget crisis is becoming too big to postpone.

Americans now have to climb out of two deep holes: as debt-loaded consumers, whose personal wealth sank along with housing and stock prices; and as taxpayers, whose government debt has almost doubled in the last two years alone, just as costs tied to benefits for retiring baby boomers are set to explode.

The competing demands could deepen political battles over the size and role of the government, the trade-offs between taxes and spending, the choices between helping older generations versus younger ones, and the bottom-line questions about who should ultimately shoulder the burden.

“The government is on teaser rates,” said Robert Bixby, executive director of the Concord Coalition, a nonpartisan group that advocates lower deficits. “We’re taking out a huge mortgage right now, but we won’t feel the pain until later.”

So far, the demand for Treasury securities from investors and other governments around the world has remained strong enough to hold down the interest rates that the United States must offer to sell them. Indeed, the government paid less interest on its debt this year than in 2008, even though it added almost $2 trillion in debt.

The government’s average interest rate on new borrowing last year fell below 1 percent. For short-term i.o.u.’s like one-month Treasury bills, its average rate was only sixteen-hundredths of a percent.

“All of the auction results have been solid,” said Matthew Rutherford, the Treasury’s deputy assistant secretary in charge of finance operations. “Investor demand has been very broad, and it’s been increasing in the last couple of years.”

The problem, many analysts say, is that record government deficits have arrived just as the long-feared explosion begins in spending on benefits under Medicare and Social Security. The nation’s oldest baby boomers are approaching 65, setting off what experts have warned for years will be a fiscal nightmare for the government.

“What a good country or a good squirrel should be doing is stashing away nuts for the winter,” said William H. Gross, managing director of the Pimco Group, the giant bond-management firm. “The United States is not only not saving nuts, it’s eating the ones left over from the last winter.”

The current low rates on the country’s debt were caused by temporary factors that are already beginning to fade. One factor was the economic crisis itself, which caused panicked investors around the world to plow their money into the comparative safety of Treasury bills and notes. Even though the United States was the epicenter of the global crisis, investors viewed Treasury securities as the least dangerous place to park their money.

On top of that, the Fed used almost every tool in its arsenal to push interest rates down even further. It cut the overnight federal funds rate, the rate at which banks lend reserves to one another, to almost zero. And to reduce longer-term rates, it bought more than $1.5 trillion worth of Treasury bonds and government-guaranteed securities linked to mortgages.

Those conditions are already beginning to change. Global investors are shifting money into riskier investments like stocks and corporate bonds, and they have been pouring money into fast-growing countries like Brazil and China.

The Fed, meanwhile, is already halting its efforts at tamping down long-term interest rates. Fed officials ended their $300 billion program to buy up Treasury bonds last month, and they have announced plans to stop buying mortgage-backed securities by the end of next March.

Eventually, though probably not until at least mid-2010, the Fed will also start raising its benchmark interest rate back to more historically normal levels.

The United States will not be the only government competing to refinance huge debt. Japan, Germany, Britain and other industrialized countries have even higher government debt loads, measured as a share of their gross domestic product, and they too borrowed heavily to combat the financial crisis and economic downturn. As the global economy recovers and businesses raise capital to finance their growth, all that new government debt is likely to put more upward pressure on interest rates.

Even a small increase in interest rates has a big impact. An increase of one percentage point in the Treasury’s average cost of borrowing would cost American taxpayers an extra $80 billion this year — about equal to the combined budgets of the Department of Energy and the Department of Education.

But that could seem like a relatively modest pinch. Alan Levenson, chief economist at T. Rowe Price, estimated that the Treasury’s tab for debt service this year would have been $221 billion higher if it had faced the same interest rates as it did last year.

The White House estimates that the government will have to borrow about $3.5 trillion more over the next three years. On top of that, the Treasury has to refinance, or roll over, a huge amount of short-term debt that was issued during the financial crisis. Treasury officials estimate that about 36 percent of the government’s marketable debt — about $1.6 trillion — is coming due in the months ahead.

To lock in low interest rates in the years ahead, Treasury officials are trying to replace one-month and three-month bills with 10-year and 30-year Treasury securities. That strategy will save taxpayers money in the long run. But it pushes up costs drastically in the short run, because interest rates are higher for long-term debt.

Adding to the pressure, the Fed is set to begin reversing some of the policies it has been using to prop up the economy. Wall Street firms advising the Treasury recently estimated that the Fed’s purchases of Treasury bonds and mortgage-backed securities pushed down long-term interest rates by about one-half of a percentage point. Removing that support could in itself add $40 billion to the government’s annual tab for debt service.

This month, the Treasury Department’s private-sector advisory committee on debt management warned of the risks ahead.

“Inflation, higher interest rate and rollover risk should be the primary concerns,” declared the Treasury Borrowing Advisory Committee, a group of market experts that provide guidance to the government, on Nov. 4.

“Clever debt management strategy,” the group said, “can’t completely substitute for prudent fiscal policy.”

Look at numbers, they speak for themselves: http://www.usdebtclock.org/

Don’t fall for the recovery line. We need to remain vigilant and continue to fight for fiscal responsibility. We must shut down the runaway government spending and let the free markets “fix” the economy. It is time to worry about the future of our children. If we don’t get the economy back on track our children and grandchildren will be condemned to a country with a European style economy and a substantially reduced standard of living. Is that what we want our legacy to be?

Wakeup, America! Speak up and be heard. Hold them accountable, they had their chance, it didn’t work – time to return to what works; the private sector, a free market economy less government and lower taxes. To save the country we love, we must revive the original American Dream, we must trust the structure of our constitutional government and the freedom it nurtures or the dream will not survive.

I’ll close with some words of wisdom from a few of our founding fathers and great leaders:

“If we can prevent the government from wasting the labors of the people, under the pretence of taking care of them, they must become happy”. – Thomas Jefferson

“With respect to the two words ‘general welfare,’ I have always regarded them as qualified by the detail of powers connected with them. To take them in a literal and unlimited sense would be a metamorphosis of the Constitution into a character which there is a host of proofs was not contemplated by its creators.” — James Madison

As Thomas Jefferson said, “I sincerely believe… that the principle of spending money to be paid by posterity under the name of funding is but swindling futurity on a large scale.”  And…“With respect to future debts, would it not be wise and just for [a] nation to declare in [its] constitution that neither the legislature nor the nation itself can validly contract more debt than they may pay within their own age, or within the term of 19 years? And that all future contracts shall be deemed void as to what shall remain unpaid at the end of 19 years from their date?”

Restore the Republic, Reject the Agenda of the Progressive Left!