A Solution to the U.S. Budget and Tax Crisis
© 2008 by Edward H. Smith.
All Rights Reserved.

The crisis at hand is the simple fact that it will soon become all but impossible for Americans to pay enough taxes to support their government's operational budget.

If you don't think the crisis is real, and/or you don't think you are a part of it, think again. Uncle Sam has already hocked our nation for over $9 trillion to cover the national debt - and your share is over $30,000. This is in addition to your total tax burdens imposed by federal, state, and local governments; which now add up to, on average, about one-third of your entire income). The most notable tax, of course, is the federal "graduated" income tax; which, through some "not-so-democratic" maneuvering behind closed doors several decades ago, became law and still serves to feed big government's love for inflated budgets and ever-increasing tax revenues to cover them.

To put the problem in perspective, just imagine if you had (a) a current income of $80,000 with (b) credit card debt of $300,000 and (c) current bills of $100,000. If this doesn't sound scary enough, add the thought that you are also responsible for the un-insured healthcare and other retirement costs for family members which might cost you as much as another $2,000,000! These numbers represent a "miniature" version of the same financial dilemma that Uncle Sam faces right now.

If the above numbers represented your real financial status, you would probably have already been forced into bankruptcy. However, since Uncle Sam can't do that; he just keeps going back to Congress to get a bigger credit limit on his "credit cards"; that you (by current law) have to make the payments on!

And why does Uncle Sam want to keep the graduated income tax in place? The reason is that, frankly, it operates like the ultimate pyramid scheme; by enabling Uncle Sam to just keep "raising the bar" until he controls every American paycheck (business or personal). Although folks with the highest incomes will be the last to fall; rest assured that, when Uncle Sam gets finished with the middle class, the fate of even the wealthy will also be sealed. Eventually America will be right back to square one as economic chaos and turmoil take over the nation as federal, state, and local taxing authorities scramble and compete for the same money (yours) to satisfy their self-serving, inflated budgets. Then what?

The sad realization here is that, slowly but surely, Uncle Sam will sink his own ship if he continues on the same course. Therefore, that course must be immediately and dramatically changed if Americans are to expect their nation to remain the leader of the free world.

Maybe the way to change things for the better is to first understand a crucial characteristic about Uncle Sam and how he operates: Basically, Uncle Sam is somewhat of a control freak and, frankly, he doesn't believe that the masses of U.S. citizens have enough on the ball to cast the proper direction and fate for America. If Uncle Sam did believe in the "wisdom of the people" (to the degree we hear the presidential candidates talking about day in and day out); we wouldn't have such a convoluted, political filter (i.e. super-delegates, electoral college, supreme court intervention, etc) used in the election of a president. It would be a straight, popular vote that was void of the need for voters to declare allegiance to a political party and/or be subject to the many months of deceptive mind-games and diversion tactics.

The idea of the people participating in a national straight, popular vote is important because it is also the first of two major components of a "common sense" approach to saving America from drowning in its own debt:

STEP ONE: Let the American people (in accordance with the premise: "government of the people, by the people, for the people") vote to set and approve a basic budget amount for the operation of the federal government.

Currently, we have it backwards. Instead of Uncle Sam telling taxpayers he's going to spend their money to oblivion, perhaps the voters should tell Uncle Sam the gravy-train just came to an end. Voters need to formally tell Uncle Sam to stop kidding himself - and decrease his budget each year for the next several decades and beyond. Cut it back to $3.0 trillion in 2009, $2.9 trillion in 2010, $2.8 trillion in 2011, etc; gradually getting rid of the pork, fat, earmarks, waste, unnecessary programs, corruption, etc. And no more deficit spending!

STEP TWO: Make the individual income tax the same for every person and set it, for example, at 10% of the current median income in the United States. Currently that would mean everyone would get an federal income tax bill from Uncle Sam in the amount of approximately $5,000 per year. Obviously, if the waste, pork, earmarks, special-interest, unnecessary, and/or deficit spending were all cut out of the federal budget; that $5,000 could be reduced substantially! It could be paid just like any other bill and it would eliminate the need for the thousands of pages of tax code that a vast majority of Americans can't begin to decipher. Getting an individual federal income tax bill would also make the notion of "equality" actually mean something giving everyone an equal stake, an equal deal, and equal responsibility. Make it incumbent upon our educational system to get everyone in a position (starting at a very early age) to become a productive, tax-paying, citizen carrying his/her full weight by the age of, perhaps, 21. Let's subsidize, with pride, only the folks that "want to contribute but can't"; and not the folks who "can contribute, but don't want to".

These two steps would go a long ways toward "re-engaging" Americans to unite in the common cause of equality and the participation with pride in a real free, democratic enterprise.

Perhaps even more important is that these two, basic reforms would create the exemplary model of a prosperous and free society for the world to recognize by example - not force. This is the American heritage we all want.

One final thought for Uncle Sam from one of his former colleagues, Abraham Lincoln:

"If you once forfeit the confidence of your fellow citizens, you can never regain their respect and esteem. It is true that you may fool all the people some of the time; you can even fool some of the people all of the time; but you can't fool all of the people all the time."

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Maybe It's Time To Let The People Control America's Checkbook
© 2007 by Edward H. Smith.
All Rights Reserved.

It was Abraham Lincoln who said, "These capitalists generally act harmoniously and in concert, to fleece the people."

Corruption, greed, inefficiency, and waste at all the levels of the American government have put the American Dream in jeopardy for quite some time; despite the many extraordinary achievements, accomplishments, efforts, and financial support of a vast majority of working Americans. This situation has existed for many years; despite the repeating cycle of "the same old progressive-sounding rhetoric" offered up by self-serving politicians who promise to change things as problems multiply and the country continues to go bust. After all is said and done, the bottom line is that the lawmakers and government officials in charge have benefited more and more while doing less and less. Perhaps too much time is spent by politicians playing the blame-game, engaging in partisan bickering, and campaigning to keep their jobs.

As if this isn't enough to worry about; the events of September 11, 2001 have created a threat of incredible proportions that, left unchecked, could eventually cause the American Dream to become a thing of the past. The basic reason for this is that 9-11 has forced the United States into a position of defense and protection against terrorist ideologies; both home and abroad. Additionally, the war on terror brings with it a mind-boggling set of extraordinary costs and implications which, if are minimized in significance or simply ignored, will accelerate our demise.

Despite George Washington's admonition to America that we avoid entangling alliances, our leaders have engineered, in simple terms, an incredibly volatile state of foreign affairs. Worse yet, it seems that a vast majority of our leaders, together with a vast majority of the people that elected them, are in a state of "suspended denial"; believing that that things will be OK if we continue on the same basic track.

Well, things are not OK. Remember the Titanic? The captain and his crew didn't "wake up" until there were only some 30 to 40 seconds left to avoid absolute disaster (after ignoring several alerts and warnings). Most of the passengers still thought "things were OK" after the Titanic was, in fact, doomed; choosing, perhaps, to focus on the continued enjoyment of their voyage.

So here we are, a nation that is:

• less than 250 years old,
  
• engaged in a "never-ending" war on terror,
  
• bankrupt,
  
• telling the rest of the world how to live while not taking care of our own, while
  
• headed for disaster.
  

Is there something inherently wrong with this picture?

Unfortunately, our nation's problems are so big and complicated that the average citizen feels hopeless about contributing to a battle-plan that can enable us to escape the demise of the American Dream.

This may be the consensus of those running our government, but it is wrong. Ironically enough, the people of the United States may be the only ones that can solve the dilemma we are in and steer the nation away from certain doom. The simple fact of the matter is that we can hardly expect things to change for the better given the decades of "self-serving" leadership exhibited by our culture of corrupt politicians, judges, attorneys, and big corporations.

America can make it through the twenty-first century without falling prey to a major international conflict, a self-destructing internal revolution, or a total financial collapse by making the government more accountable for spending the money they are entrusted with in accordance with the people's budget and national objectives. In short, give the "purse-strings" back to the people and take it away from those who have compromised the security and status of the greatest nation on earth through their allegiance to political and financial interests at odds with the will of the people. This can be accomplished by giving American taxpayers a more direct voice in the U.S. budget and tax process by letting them debate and determine (perhaps through an annual referendum):

1. the amount of each basic component expenditure of a master government budget,
   
   
2. the gross amount of federal tax to be assessed in order to cover those specific expenditures, and
   
   
3. the resulting individual federal tax bill to be paid by each American citizen (to replace the existing graduated personal income tax).
   
   

Such a shift in power is both morally and economically crucial to our survival. In a government "of, by, and for the people", it would seem reasonable that the people should actually (not theoretically) be able to determine their fate. After all, isn't that what a representative democracy is supposed to allow?

Currently, it does not. Our individual fates and opportunities as citizens are handed to us on a "take it or leave it" basis by a self-serving government that wastes and misallocates money while saddling us with an unmerciful amount of taxes, fees, charges, costs, assessments, subsidies, allocations, fines, and penalties while many in control are financially privileged and fundamentally unaccountable. Power, control, prestige, and money are what big government is all about. Service to the people that pay, some with their lives, is secondary. Even the courts are run, in the final analysis, by self-serving attorneys who worship money, not justice.

The essence of this solution is that it gives the people of the United States the purse strings to run the government. Let the people determine how the money collected by the government should be spent or invested. Put the people in a position to just say "no" if they don't want it spent on such items as a war that costs thousands of lives and hundreds of billions of dollars.

This solution has a number of profound implications that will dramatically help straighten out the serious problems that our country faces. Consider the following:

1. This approach would attach more meaning and importance to an individual's status as an American citizen; creating that same underlying, relentless motivation that paved the way for women's suffrage and civil rights movements. Perhaps it's about time to find out exactly who's here in America and make them productive citizens with a stake in our future or send them home. Currently, we're running the largest "free day care" in the world.
   
   
2. There would be no need for individual citizens to file federal income tax returns. Imagine the convenience, simplicity, and efficiency of getting an annual tax bill, in an amount equal to everyone else, and simply paying it like any other bill. There would be no need for the government to invade everyone's privacy and personal business under the guise of determining the appropriate "income" tax. For the same reasons that every other service we buy is not, for the most part, subject to how much money we earn; neither should the services provided by the government cost more for an individual who earns more. There would be an equitable and equal federal tax amount for every citizen between, perhaps, the ages of 18 and 65. A significant part of each child's education in this country should be the preparation necessary for each individual to become a productive citizen who accepts and meets this responsibility to both participate in, and support, the federal government.
   
   
3. The federal budget would reflect the will of the people; since it would directly determine the amount of everyone's tax bill. We would see a more aggressive involvement by the people in their government with a constant public debate over how much should be spent on exactly what. Folks would focus more on what's really needed. Excessive government spending and waste would come to a screeching halt. Maybe the people of the United States would be less interested in our current imperialistic approach to solving the rest of the world's problems and more interested in solving our own problems of national security and domestic recovery. Maybe the people of the United States would prefer to invest money in our own defense, education, health care, and retirement instead of loaning other nations billions of dollars.
   
   
4. For the first time in a long time, the government would be accountable to the people in a meaningful way. In a democracy, a government should, first and foremost, be responsible to the people. As you know from every organization that you have ever participated in, control the purse-strings is mandatory to achieve results. It doesn't take a genius to figure out that private interests, not the people, currently have control of the US "checkbook". If the people do not get control of America's checkbook; the nation's financial problems will escalate beyond any possibility of recovery.
   
   
5. This plan represents a constitutionally sound approach to our nation's problems; even if it would mandate state and/or federal constitutional amendment(s). Unfortunately, we are almost out of time if we want to prevent absolute disaster. Given the rate we are engaging in, and contemplating, military conflicts around the world and accelerating the expenditure of money we don't have (predominately at the expense of the life and property of the common man, and not the privileged government hierarchy); there is little time left before we risk a total collapse. It is fair to say that a vast majority of our government leaders are in a dangerous state of denial and, worse yet, they have kept the public in the dark through a government culture of self-preservation and self-exemption from the rule of law.
   
   

For those of you that are, perhaps, still clinging to the optimistic belief that "things will be OK", please also consider the fact that all of the following costs are sky-rocketing in America: defense, energy, education, health care, retirement and pension obligations, legal costs, infrastructure maintenance, insurance, transportation, and communications. At the same time, the US dollar continues its devaluation, the national debt goes higher and higher, deficit spending continues, trade deficits continue, and the country is facing yet another real estate bubble ready to burst. To top it all off, 1 out of every 138 US residents is in prison; costing us billions more that we don't have. Apparently, the economic gurus in Washington believe that, as long as the printing presses are rolling at the US Treasury, we can pay for anything we want and America can enjoy never-ending inflation without any serious repercussions.

Tragically, like a terminal cancer, our nation is now having its very life-blood sucked dry by a self-serving government and its culture of attorneys. It won't be long before the common person can no longer survive financially and the "American Dream" becomes a thing of the past. This is a fate that may be just around the corner. The rich, powerful, and privileged will hang on the longest because, of course, they control the requisite resources to survive. The rest of us will be on life-support waiting for FEMA to arrive.

The bottom line is that, if the American people are to survive their failed government, they must take control of their own fate and their own money. They can do it only by having real control (and not theoretical control) of their own government. It's time to give them America's checkbook so that America's greatness can be restored and, perhaps, we might all share in a future opportunity for "life, liberty, and the pursuit of happiness".

The best shot we have for America's survival is for the people to take control of America's checkbook and get a tight grip on America's purse-strings.


EHS REPORTS
Edward H. Smith, Principal
PMB 296 at 816 Elm St., Manchester, NH 03101
edsmith@ehsreports.com