General: Liberty Note | 12-17-09

We must arm ourselves with the truth to conduct the fight for freedom.

“This week the U.S. Congress votes to raise the national debt ceiling nearly $2 trillion, to a total of $14 trillion. It is a sign of how deep the fiscal pathologies run in this Congress that $2 trillion will buy the Federal government only one year before it has to seek another debt hike.” (W.S.J., Dec. 16, 2009, p. 26)

TAX REVENUES RECEIVED BY THE FEDERAL GOVERNMENT

2003 $1.783 trillion TAX CUTS PASSED (Government Revenues Increase)
2004 $1.880 trillion [Increase of 5%]
2005 $2.154 trillion [Increase of 15%!]
2006 $2.407 trillion [Increase of 12%!]
2007 $2.568 trillion [Increase of 7%!]
2008 $2.524 trillion [Decrease of 2%] Recession
2009 $2.157 trillion [Decrease of 15%] Recession

Despite the increases in revenues through 2007 and the fact that 2009 revenues were still 20% higher than 2003 following the tax cut and the bubble-induced recession, the federal government spent a record $1.4 trillion more than it collected in the fiscal year ending September 2009.

After $787 billion of pork projects [minus $200 million in real tax cuts] slithering through the nightmarish federal procurement process, rather than unemployment being at the promised 8%, it is 10%. And most of the pork expenditures are yet to come, due to the fact that the federal government cannot execute large projects in an effective and timely manner because of legal constraints leading to complex and costly processes [see Federal Acquisition Regulations (FAR)]. A competent leadership would know this.

When the feds raise the federal debt limit to $14T, the debt per person including all 305,000,000 US persons will be $45,900. So you will have a $46K mortgage on a nonexistent home – and you will have to pay for it! Just think what happens when we have a real interest rate!

Long before U.S. debt reaches the upcoming stratospheric levels, “fears of inflation and a prospective decline in the value of the dollar would cause investors to demand higher interest rates on our debt and or shift out of U.S. Treasury Securities.” (Washington Examiner, Dec. 16, p. 2)
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