Sunday, May 12, 2019
Woke or Broke?
In recent years “Woke” has become THE word with progressives. It originated as a way of expressing how people should “wake up” to the social injustice in our society, especially when it comes to issues of race. It’s now being used to describe the appropriate level of awareness one should have about all social justice issues and just about everything else on the progressive agenda including climate change.
But I have some bad news for the Woke and the Un-Woke….”We Broke”. At this moment in history, when millions of people are “Woke” and demanding that we “make things right” and get about it immediately, we are broke. Just consider:
_Our national debt is over $22 Trillion…that’s more than our annual GDP and it doesn’t include all of the unfunded liabilities which are now approaching or may exceed $200 Trillion !!!
_We are still adding to our debt at the rate of over $1 Trillion per year.
_Federal government spending represents over 20% of our GDP, state and local spending adds an additional 5 to 7 %.
_Household debt is at a record level, $13.3 trillion.
_Our national savings rate is only around 3% of income.
So we have a math problem when the “Woke” demand that we spend:
_$8-10 Trillion per year over the next ten years for a Green New Deal
_$3-4 Trillion per year for universal healthcare
_$5-10 Trillion for slavery reparations
_$1.5 Trillion to pay off student loans
_$75 Billion per year for free college
And, oh by the way, this is before we even talk about something most all of us can agree on which is fixing our infrastructure. Depending on how “Green” we go and what sort of commitments we were to make toward mass transit systems, upgrading our infrastructure could be the most expensive endeavor of all; perhaps $5-10 trillion per year over the next 20 years. And that doesn't include what we need to spend just to patch and maintain what we already have.
So how do you pay for it? Where do you come up with this much money in a $21 Trillion dollar economy that is already drowning in debt? Raise taxes? How much and on whom? You could double the taxes on those making over $1M per year and not even come close.
We all better wake up and come to terms with the fact that it will take us at least 50 years to dig out of this hole. And, I'm not even suggesting that we get totally out of debt. A national debt at 50-60% of GDP is manageable. And some level of household debt is to be expected. But remember, we have over $200 Trillion in unfunded liabilities that is not even on the books.
So what do we do? First of all, everyone who can work, needs to get to work. We need production. Secondly, we have to increase taxes and reduce spending wherever possible. (We all know there are government agencies and programs that could vanish tomorrow and no one would notice, other than those people who've been getting paid to ride that gravy train.) And yes, we will have to spend money on infrastructure, healthcare and education. We are at a tipping point in this nation. Too much wealth at the top and too many struggling to make ends meet. We have a lot of angry people on the Left and the Right. History tells us that when you get enough people fed up with the status quo, change will occur. The real question is what will that change looks like and who has the guts and grit to lead us out of this mess?