The last 5 budgets of the United States of America, hold entire planet’s record for the 5 highest record deficits ever recorded by anyone in history, by anyone.

George HW Bush (41) is actually responsible for instigating the good years by requiring that any tax cuts must have equivalent cuts in spending.

Clinton added to good fiscal policy when he got passed the balanced budget amendment.

Throughout American history, every generation has endured hardship and has done whatever was required to better their children’s future.  George Bush undid that .  Because of Republican tax cuts, and only because of Republican tax cuts,  we will be the first generation to give their children a world far worse than the one they inherited, because deficits do not matter.

Had we as a nation continued through Gore, with the plan originally begun by George HW Bush, then expanded by Clinton,  we would currently be right on track today with no deficits in sight for forty years forward into our future!

WE, the People, chose not to go down that path by our nation’s choice in the 2000 election.

Today the average household continues to purchase well over 120 percent of whatever they earn…. In other words they borrow 20% of their income every year….  Their government since the year 2000 has turned what was estimated to be a 5.6 trillion surplus, into a 9.5 trillion deficit.  Almost a $15 trillion dollar shift by one president, and his reign of one party rule. $15 Trillion.   That huge debt is being bought by other countries.  We pay 60 million dollars each day in interest to China alone.  That money cannot be spent here.  Why?  “Because deficits do not matter.” Because we decided to cut taxes and then spend more, and more, and more, and more….

Giving other countries our money, is not only an economic weakness, but it is also a security risk as well… It’s 60 million we cannot spend on defense… but our future enemies can spend to defend themselves from us…… Scary huh? “Deficits do not matter…..”

Not since 1928 has their been the same gap between the very wealthy and the rest of America… This past year, the medium American income of $75,570 dollars has declined $974 dollars.

We haven’t cut back on spending, and yet we race to borrow more…. If we were a corporation required to set funds aside for the long term , we would be insoluble..  One cannot spend more money than they are projecting coming in, unless they can figure out a way to pay for it.. This year we passed an amendment that said we will deal with the current budget imbalance next year…It was the only way the Republican Senate would pass a budget bill…….

Ronald Reagan. once said, ” we must act today to preserve tomorrow…”

Forty years ago 60 % of budget was spent for defense.  Last year it was down to 20% and that include the supplemental for  Iraq, Afghanistan, as well as the rest of the defense budget.  Now, Social Security exceeds defense spending;  Now Medicaid/Medicare exceed defense spending.  Interest cost, will soon exceed defense spending, perhaps by next year….

Today Congress decides how to spend only 38 % of our Federal Budget.            62 % is spent on auto pilot.   Every part of the Constitutional mandates those individual items outlined by the Constitution, items like “provide for the common defense”,  are all included in that 38% of budget being squeezed.

Foreign lenders in the past 10 years have risen from owning 28 to 45 percent of our debt. For you see, no one in America is saving…. Our own share of the national debt has drop from 62, down to 40 percent of which is domestically owed.  How fast does this happen?  For example a year ago China held the notes to $471 billion dollars of our debt.  This August, they own $506 billion.  That $35 billion increase over just one year, represents a 7.4% increase in the amount we owe them…  In other words we will at 12% interest, pay them 60 billion dollars in one year… But according to Cheney, “deficits do not matter…”  According to Cheney, there is nowhere within the United States where $60 billion can do us any good, so we might as well give it away…..

Another point worthy of note is that we owe China one entire year of our Federal budget; we owe japan over one entire year of our Federal budget; we owe Britain one half of our yearly Federal budget; we owe the Middle East Oil Exporters  one third of our entire yearly Federal budget.  Just this small group alone would suck up over three years of our entire Federal budget.  That would be represented by every penny spent on Federal programs since 2005.  That huge sum…. is what we owe thanks to the Bush tax cuts…

To fight WWII we incurred debt. But we owed it back to ourselves… Now half of our debt payment goes to foreign leaders.  Our national mortgage is being held by foreign players. Our interest paid on that debt, benefits no longer ourselves, but our future enemies.

The $9.2 Trillion dollar deficit will be the legacy of the Bush years  Added to the $5.6 trillion positive benefit which they inherited in 2000, go figure just how great Republican economists are with their mantra of “deficits do not matter.”

53 Trillion is the grand total of all America’s net worth…  17.4% of every American’s self worth would be required if we were to fill up that hole.  The hole is $31 thousand dollars per every man, women, and child …..Now you know why babies cry upon being born….. someone told them they owe $31 thousand dollars.

In 2006 the medium household income is less than $50,000.  The payment needed to be made on this amount by every living American, is like an additional $450 mortgage placed on their house per person living there.. Not only do they now have to pay off the first mortgage, and maybe their second mortgage, but now they also have to pay off the Cheney/Bush mortgage….”Deficits do not matter….”

It was two percent of taxing which made all the difference. We went from 20 to an 18 percent of taxing our economy. Just returning back to that 20% would one day give us back our 40 years of balanced budgets. 

The idea of using a deficit to finance our day to day operational expense, got started in the 80’s under a Republican president who ran on cutting taxes, but still needed to fund his costly programs he was proposing……..America is being mortgaged.  It is to the generations yet unborn, that Republicans have left the bill to pay for all the Republican’s bills.

Entitlements and Interest will soon take up the entire budget if we do nothing..  If we do not double taxes, yes double, we must do away with all government programs which work to “establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity. “The economy will continue to grow, but our entitlements will grow even faster…Medicare is already at a negative cash flow, and Social security will be so in 10 years.

Our personal savings rate has dropped like a rock. Last year it was negative. The last time that economic indicator was this bad, was during the Great Depression.  Up until last year, the American people had the “wealth effect” based primarily on how they felt about rising housing values, so they did not feel the need to save, but resorted to “conspicuous consumption”. yes that drove our economy, but it drove it further off the cliff. As we were recently reminded, housing prices do not always stay high; interest rates do not always stay low.  This trend of spending all and saving none, will have to be reversed.  People will have to save for themselves.  Dramatic changes if not made, will most certainly bankrupt America.

The permanent change is demographic.  The tsunami of Baby boomers are coming of age.  Social and Medicare were not designed to support people for one third of their life.  In Germany, Bismark was the first to propose a governmental pension plan…. but whereas he started his modest pension payments at 65 years of age, the lifetime expectancy was then 55..  Today with a lower labor force growth, how will the economy grow?  People will have no choice but to work longer… Fortunately most of our nation’s economy runs on brain power and not brawn power, and longer lives can continue to be productive as well as engaged in keeping entitlements down…..

The US is the only super power today. Yes, there are others rising, but right now, as the only superpower, we rank 16 out of 28 in the key economic indexes. That puts the worlds sole superpower…. 16/28…….below average.

Pragmatically one can’t have all guns and all butter. One surely cannot have all guns, all butter, tax cuts and entitlement packages…. for you go broke..

Social Security? The trust fund is naught…  Once we hit the 2011 surplus inches downward and by 2017 negative cash flow; we must borrow more from the Chinese to pay for own social security…

Social Security reform? Whether you are retired or close to retirement, you will continue to get current deal.  That age category won’t have time to make the necessary adjustments. However the younger one is, the more likelythey will be affected by the changes, but those individuals have the opportunity to act now,and make their adjustments over time…. Replacement benefits at the poverty level are expected to increased, and those in the upper and middle levels are guaranteed to decrease.  The rates of contributions will not rise. There is no more room for them to go higher… We will need some type of supplemental mandatory add on, which will have provide real savings with real assets and liabilities…which will have to be stored in a “lock-box” immune from being used to balance a president’s budget…

We spend more than double per person,  on health care over that from any other country on earth. We rank 23 of 26.  We spend more money, we get poorer results.

Health care cost now rise 2.6% more than the economy grows every year.  Gap gets wider each year… The most powerful force is that of compounding…   As an investor, the power of compounding works for you; as debtor, and the US is the world’s largest debtor, it works against you….

Insurance? The young says not now.  They see no need and want to spend cash on something else…  Businesses are starting to stop their health care offers because  health care costs are out of control.  Health care is part of ones compensation and employers concerned with rising costs, since they are paying more and more for health-care, cannot raise wages because of it…

Medicare in just 11 years from now, its trust fund goes dry.  (Think back where you were 11 years ago. It comes sooner than you think) Negative cash started this year….2008. Negative Cash flow means that we need to take money from somewhere else in our budget, to pay ones medical expenses.

WE are the only country that has no budget on health-care.  All other civilized nations do, for it will bankrupt their countries if they don’t.  Increase personal responsibility for our own health and wellness.  This will bankrupt America….

IOUSA…  fairly timely message.  It comes out on August 21st for a week and will play at both conventions.  Our financial condition is worse than our nation advertises.  As a citizen, you need to start rewarding and electing officials who make tough choices.  You need to reject people who pander to you .. WE the People have to come alive… Until we make the political cost of doing nothing more dangerous to a politician then doing something, we will drop like a bucket in serving our stewardship responsibilities to our future generations.  The Roman Empire lasted1000 years.  Rome fell because of its declining moral values.  its overconfident and over extended military, it’s inability to control its borders, and it’s overspending of its assets…

The only one thing that we have in our favor, against this bleak dismal future, is that Americans have always done the right thing….  They always rise up and make themselves accountable when their nation’s welfare is in balance. That unfortunately is the only good news we can offer…

Obviously to fix it… we need to save more and spend less.  It’s a wide problem but is one that can be done.  The wideness comes from the fact that we are already overextended now, thatin order to save, we need to lower out cost with which we pay to live.  Obviously dropping our energy cost by creating all of our energy free sources fits well with this plan, and capturing and saving that huge amount in a savings plan, would begin to restore our fortunes as individuals and as a nation…

Just a thought problem: What if we were mandated to save 10% of our income into savings… an income of 40,000 would save 4000 a year….  At a measly 5% rate of interest that amount over a lifetime of just 40 working years,  would yield $508,668 dollars.  The largest stumbling block preventing saving today is that if one can’t live with one is making now, therefore how can they live with $4000 less?   To make this a workable plan, we will have tosomeway lower the cost of living by $4000. We have to do it some way, somehow…. but it can be done…..

Now, we need to require business and corporations to do the same thing.  So off the table we take 10% of the profits of each and every business or corporation. Like individuals, they are required to save 10% of their profits in a savings plan…We can choose not to tax or to tax that amount, depending on our Federal outlook, in the long term as long as we are saving something, it doesn’t matter.

WE then need to insist that the Federal Government does the same.  WE need to require that 10% of our budget goes to pay down the Foreign owned portion of our debt.  That net effect to us is the same as savings.  if we are going to owe someone, at least keep that money remaining in our country by paying our interest back to ourselves….Of course we will need to cut that amount out of our entitlements, eventually amounting to 2.6 trillion dollars, some way, some how… But with mandated savings plans already in the works, it is no longer impossible… it can be done….

The most capable candidate who can sell this to the American people, will win.  People want to follow leaders and they are willing to participate in positve, pragmatic solutions that get things done….The American people who are trying to figure how to put gas in their car, under stand what it means to live within ones means.

I heard Governor Pawlenty (R-MN) try to seize this issue today.  if Republicans win control of this issue, the election will be theirs…