26th Feb, 2010

SKY-HIGH SPENDING, ESCALATING BUDGET DEFICITS AND MOUNTING GOVERNMENT DEBT—— Trillions of Reasons to Oppose the Status Quo in Washington (Part I and II)


1 Year and Counting

After a year in office and a record increase of $1.4 trillion dollars in deficit spending, the President now tells us that our nation is experiencing a “deficit of trust” in our national government. This is strikingly similar to former President Jimmy Carter’s description of the “malaise” he saw among the people but somehow could not understand or remedy.  Fortunately, Ronald Reagan soon followed.  He ushered in the return to conservative principles and reduced taxes. This soon spawned a soaring and lasting economic recovery.  “Malaise” gave way to “Morning in America.”  It will happen again if the people reject the flawed assumptions and government dependency offered by the current Democrat majority in Washington.  We must reclaim the vision and wisdom of former times and apply the lessons of liberty and principled government, which they provide.


Alexander Hamilton is viewed as the primary influence behind the creation of the United States Treasury and our nation’s early fiscal policy.  He said, “A national debt, if it is not excessive, will be to us a national blessing.” (Hamilton’s Blessing-The Extraordinary Life and Times of Our National Debt, John Steele Gordon, p. 20). In our day, however, the national debt has long since become “excessive” and ceased to be a blessing.  It is now over $12 trillion.  Congress recently had to again take formal action to raise the permitted debt ceiling (thus proving that there really is no ceiling at all). Based on the President’s first two budgets, Washington is currently on track to double the national debt over the next ten years. (We pay ¼ of a trillion dollars each year just in interest payments on our national debt). Things have got to change but then, that is what we were promised in 2008. (“Change” is now what’s left where dollars used to be).


The day before Christmas, the Senate voted to raise the ceiling on the government debt to $12.4 trillion. The House and Senate voted to raise the debt ceiling by $290 billion.  That is a massive increase over the former artificial limit. (They have since again voted to raise it even higher).  In just the first year of the new Obama Administration, the government has racked up a record $1.6 trillion deficit.  This includes approximately $780 billion for the so-called “Stimulus Package” (unemployment has since topped 10%) and does not include the additional $2 trillion debt that the proposed “healthcare reform” Bill will bring in the short term and more when extended over the next five years.

Again, stop and consider the impact of the past year and the direction in which we are heading.  President Obama’s first year in office (with the Democrat majority in both the House and the Senate committed to carrying out his agenda for “change we can believe in”) produced a record budget deficit of $1.6 trillion. That is the largest deficit in one year since World War II. The down economy caused revenue to drop 17% but the President and Congress chose nonetheless to increase spending by 24%. Declining revenue only accounts for 13.8% of last year’s deficit. Continued excess spending and an entrenched unwillingness to shrink the size of government are the culprit for the “surge” we are seeing.  The single year increase in the deficit under the new Administration ($1.6 trillion) was just 25% less than the previous eight years combined ($2 trillion). (See Human Events, Vol. 65 No 34, p. 1, 10). Is it any wonder the President and Congress are looking all over for someone and something to tax?


HOW MUCH IS A TRILLION DOLLARS?  Don’t ask Congress – they don’t seem to know.  The easiest way to understand “one million, million” dollars or $1,000,000,000,000.00 (a trillion) is to think of it this way:  If you lost $1 million dollars a day beginning the day Jesus Christ was born and continued to lose $1 million a day for the next 2,009 years up to the present, you would still not reach $1 trillion. Keep that staggering thought in mind as you watch the Obama Administration in just 12 months tack an additional $3 trillion on to the national debt through its ever expanding welfare state enactments.  Their out of control spending and divisive class warfare assumptions and proposals claim to “only” penalize the “rich.” This is needed, they say, to fund whatever everyone else may desire. Remember that the top 5% of all income earners in America already pay roughly 60% of all the tax revenue received by the U.S. government. (See prior blog post in archives on this site on January 31, 2008).


President Obama wants to raise taxes and reduce the tax deductions allowed for charitable donations and home mortgages. His answer to critics of his sweeping tax grabbing proposals is:  “It’s a realistic way for us to raise revenue from people who benefitted enormously over the last several years. It’s not going to cripple them. They will still be well –to-do.” (S.L Tribune March 25, 2009, p. A7).

Message to Washington—“Thou shalt not covet.” (Exodus 20: 17).  Economic freedom in America is not defined as the minimum residual earnings we cling to and are allowed to keep after an all-knowing and all-powerful Federal government decides what will not leave a person “crippled?”  (Consider the many alarming trends and evidence of socialistic thinking, which we are witnessing today.  See prior post in archives on this site on April 28, 2009).



The Founders established a Congress made up of part time citizen legislators who went home and lived under the laws they passed.  The representatives personally experienced the effects of the economy they helped foster.  Not so, today.  Far away, distant and detached, full time career politicians are completely insulated from real life.  Remember the quip from former Senator Everett Dirksen who said, “A billion here, a billion there, and pretty soon you’re talking about real money.” With such a casual approach to “billions”, indifference to “trillions” comes easy, quickly and as no real surprise. 

To bring the national debt down from “trillions” to mere “thousands”, Congress tends to conceptually spread the total combined debt over 300 million citizens. Thus, every citizen is thought to be responsible for “only” about $ 40,000.00 and growing.  The Peter G. Peterson Foundation, led by former U.S. Comptroller General David Walker, has tallied all unfunded Federal entitlements laws and it comes to $56.4 trillion or $435,000 for every fully employed American worker.  (See, Human Events, Vol. 65, No. 42, p. 8.).

All of this can make us rather numb to the calculations.  Nonetheless, there are two halves to a sound national fiscal policy – the country’s tax system and its spending habits.  Both are seriously flawed under the status quo in Washington. The current majority in Congress and the President share a common passion for big government and an ever-expanding welfare state.  Such thinking relies on the government to tax, gather and redistribute the wealth (the people’s earnings).  There stated desire is to end poverty but they actually impoverish the people by removing the incentive to work, save, hope, invest and dream.


How did the world’s oldest and greatest Republic lose control of such a fundamental responsibility of government as its own budget?  The answer is – one seemingly innocuous step at a time. A former chairman of the Federal Reserve Bank has written, “The hour is getting late…. [The] political parties are …not facing our problems. They are running from them. They are locked into politics of denial, distraction and self indulgence….The American people don’t see statesmen working together [to solve our serious financial challenge]”.  (Running on Empty, Peter G. Peterson, p. xiv, xix, 8).

Most state constitutions require a balanced budget.  The Federal government, however, needs the flexibility in case of a national emergency (such as war) to borrow if needed to defend itself.  Much of the early national debt was the result of our national defense.  The Revolutionary War debt stood at $245 million in 1784.  World War II brought us through the Great Depression.  By 1946, the national debt stood at $269 billion, almost 17 times what it was in 1930.  The war years added $211 billion dollars to the national debt.  That seems small and insignificant today in light of the sums Congress so quickly and casually adds to the national debt.

Current deficit spending and the national debt are used to fund massive government entitlements, social engineering and compounding Federal mandates rather than strictly war powers.   To meet the demands of a domestic crisis of our own making, Congress adds again and again to an already out of control national debt.  This has created an even greater financial crisis, which seriously threatens our nation’s future stability.

One writer has noted, “In the 1860’s, we used the national debt to save the union (Civil War). In the 1930’s, we used it to save the American economy (the Great Depression).  In the 1940’s, we used it to save the world (World War II).”  In that sense, Hamilton was right.  In times of crisis and when used cautiously, the national debt has at times been a national and even a global blessing.  But is it still?  Is it now a burden or a curse? It’s not the debt itself that Hamilton described as a “blessing” but rather the ability to borrow if necessary.  As with all self-government, that principle presupposes that the people’s representatives will have the wisdom and self control to responsibly exercise such power.  (Hamilton’s Blessing – The Extraordinary Life and Times of Our National Debt, John Steele Gordon, p.174).



You are awesome. Thanks for your continued diligence. I appreciate your well-written newsletter. You are missed at the capitol. What else do you have going these days?
Jim McKain

LaVar, I hope you are leading in a direction of what we can do in order to right our sinking ship before it is too late.

Am i wrong in feeling that we need to “recall” or pull some people out of office both in D.C. and even our own Legislators in order to get everyone’s attention and let them know we are serious. You know the ones I am talking about.

What about the 1300 departments in D.C. that are unconstitutional? I can send you the list. Are the taxes to run these departments and the real estate they are housed in breaking the backs of the Citizens? We are talking serious dollars here and should not even exist.

I believe it will take a stick of dynamite in order to clean up D.C., but we could sure shake things up in Utah.

Wally McCormick


Am I the only one that seems to be able to foresee the massive inflation coming as a result of these trillions of dollars of bailout money.

Neil Barofsky has noted that Obama’s bailout money might go as high as $23.7 trillion, too high of course to be borrowed and will have to be monetized, a polite word for counterfeiting. If this is all monetized on top of a $14 trillion GDP it projects a future 170% inflation rate.

Leonard Olds

Great comments. I feel compelled to reach out to a what I see as a growing “coalition of the fed up.” We love our country and have so much to be proud of and grateful for but this can’t continue. It is unprincipled government that produces such conditions. I look forward to your added comments next week on Parts III and IV in our continuing forum. THANK YOU. LaVar

Thanks for your thoughts. As always you are right on the money. We need knowledgeable and sincere citizens like you in our legislature.

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