The Right Opinion

Future Generations

By Walter E. Williams · Dec. 5, 2012

Is there any reason for today's Americans to care about what happens to tomorrow's Americans? After all, what have tomorrow's Americans done for today's Americans? Moreover, since tomorrow's Americans don't vote, we can dump on them with impunity. That's a vision that describes the actual behavior of today's Americans. It would be seen as selfish, callous and ruthless only if it were actually articulated. Let's look at it.

Businesses, as well as most nonprofit enterprises, by law are required to produce financial statements that include all of their present and expected future liabilities. On top of that, they are required to hold reserves against future liabilities such as employee retirement.

By contrast, the federal government gets by without having to provide transparent and honest financial statements. The U.S. Treasury's “balance sheet” does list liabilities such as public debt, but it does not include the massive unfunded liabilities of Social Security, Medicare and other federal future obligations. A conservative estimate of Washington's unfunded liabilities for the year ending in 2011 is $87 trillion. That's more than 500 percent of our 2011 GDP of $15 trillion.

Former Congressmen Chris Cox and Bill Archer have written an article – “Why $16 Trillion Only Hints at the True U.S. Debt,” The Wall Street Journal (November 26, 2012) – pointing out our dire economic straits. They say, “When the accrued expenses of the government's entitlement programs are counted, it becomes clear that to collect enough tax revenue just to avoid going deeper into debt would require over $8 trillion in tax collections annually. That is the total of the average annual accrued liabilities of just the two largest entitlement programs, plus the annual cash deficit.” Let's analyze that.

Washington would have to collect $8 trillion in tax revenue, not to pay off our national debt and have reserves against unfunded liabilities, but just to avoid accumulating more debt. Recent IRS data show that individuals earning $66,000 and more a year have a total adjusted gross income of $5.1 trillion. In 2011, corporate profit came to $1.6 trillion. That means if Congress simply confiscated the entire earnings of taxpayers earning more than $66,000 and all corporate profits, it wouldn't be enough to cover the $8 trillion per year growth of U.S. liabilities.

Given this impossible picture, the message coming out of Washington, especially from our leftist politicians and the news media, is that we solve our budget problems by raising taxes on the rich. If Americans were more informed, such a message would be insulting to our intelligence. There are not enough rich people to satisfy Congress' appetite.

In 2011, Congress spent $3.7 trillion. That turns out to be about $10 billion per day. According to IRS statistics, roughly 2 percent of U.S. households have an income of $250,000 and above. By the way, $250,000 per year hardly qualifies as being rich. It can't even buy a Learjet.

Households earning $250,000 and above account for 25 percent, or $1.97 trillion, of the nearly $8 trillion of total household income. If Congress imposed a 100 percent tax, taking all earnings above $250,000 per year, it would bring in about $1.9 trillion. That would keep Washington running for 190 days, but there's a problem because there are 175 more days left in the year.

The profits of the Fortune 500 richest companies come to $400 billion. That would keep the government running for another 40 days, to mid-July.

America has 400 billionaires with a combined net worth of $1.3 trillion. If Congress fleeced them of their assets, stocks, bonds, yachts, airplanes, mansions and jewelry, it would get us to at least late fall.

The fact of the matter is there are not enough rich people to come anywhere close to satisfying Congress' voracious spending appetite. The true tragedy for our future is that there are millions of uninformed Americans who will buy the political demagoguery and treachery that our problems can be solved by taxing the rich.

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3 Comments

wjm in Colorado said:

The ministry of propoganda and indoctrination centers have produced an electorate too ignorant to comprehend this. Just the way the marxists want it. Bye Bye America, we had a good run, get ready for the collapse, it can't be avoided with such a stupid populace that voted to destroy the country by voting for traitors.

Wednesday, December 5, 2012 at 11:35 AM

Wayne in Hinesville, GA said:

The idiot liberals voted themselves right into poverty. What are they going to do when the entire economy tanks? No doubt they will be in the streets rioting, burning, and looting because they won't know how to survive without government handouts. It won't be safe for anyone who isn't armed and prepared to protect themselves and their families.

Wednesday, December 5, 2012 at 3:16 PM

David West in Phoenix, AZ said:

Until the literacy rate improves across the board we will be condemned to be impoverished by the congress and the elites who inform and buy them. The only alternative I can see is term limits and some change to the rules the congress plays by. For example, do not allow a bill to address more than one subject. Bills that include anything that is outside the enumerated powers clause are null and void and declaration of same can be requested by any state. All bills voted on by house and senate must be complete before the vote. Any regulations etc. required to implement the bill are to be written by congress, not executive branch appointees and will include the penalty for violation. Any matter to be reviewed by SCOTUS will be decided solely on constitutional principles as originally set forth unless amended in accordance with the provisions set forth in the constitution. Any bill may be challenged by states affected and upon challenge shall be suspended from application until all allowable reviews are complete. Rules adopted by House and Senate shall be free of any taint of bias or favor of one party or the other. At the start of each new congress all leadership positions positions will be up for grabs because seniority considerations will not apply. The people elected to Congress will, to the best of their ability, remember they must represent ALL their constituents.
These comments/suggestions are just a start on what we need to do to get the country back on track. I could write many more but I think the idea is clear.

Wednesday, December 5, 2012 at 3:22 PM