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Originally posted by smokingman2006
reply to post by xuenchen
added a link on OP just scroll down to the video
At $14 Trillion debt (time this book was written Spring 2010) our debt was 7 times our Government’s income taxes of approximately $2 Trillion. By January 2013, with projected $16 Trillion debt, our debt will be 8 times our Government income taxes. Will you get a loan if your debt exceeds your annual earning potential by 8:1? Investors will not with combination of such a high debt level and inflation at 10% and rising. We also have no plan to pay off our debt. This is incredible. At $15 Trillion debt (Nov 2011) with an annual payment of $500 Billion it would take 30 years to pay off our debt – IF we do not borrow more, but we do to tune of $1.5 Trillion per year. 30 years is not an aggressive payment schedule. Still, to make these payments we’d have to eliminate our annual deficit of $1.5 Trillion. So we would need $500 Billion + $1.5 Trillion or $2 Trillion in total in taxes to start the 30 year plan. With US annually bringing in only about $2 Trillion in Treasury revenue ($900 Billion income taxes, $1.1 Social Security and other), we would need to increase taxes by 100% or income taxes by 200% thus beginning slow road to pay off our debt. Rising inflation and thus interest rates would make this much more difficult and expensive. Conclusion: our debt is now ‘TOXIC’.
Potential solution: Across the board (thus fairly) cut 30% of our federal budget (it has grown 28% since 2008). This will save $1.14 Trillion. Then implement the revenue neutral and progressive Fair Tax, essentially tax reform largely based on taxing consumption of new products and services with prebates to low income). The Fair Tax will eliminate the IRS and $430 Billion in annual compliance costs. Add $340 Billion to $1.14 Trillion. At $1.48 Trillion we are close to the $1.5 Trillion annual debt.