America's fiscal problems, including the grandchild tax, can be solved by putting government in the hands of grownups, people who know what responsibility is. Putting government in the hands of grownups is the opposite of leaving government in the hands of fiscally-irresponsible conservatives, men like George Bush.
How do grownups manage their fiscal problems? They set a budget, and they stick to it. They recognize that paying off debts comes first. Everything else comes later. We must spend less, unless Congress insists on taxing more. There will be whiners chanting 'you can't cut..." whatever. They are wrong. Look up the beautiful history of our wonderful country. We survived before without all sorts of Federal Programs, and we will again.
Let's start with paying off our debts. The National Debt is over 8 trillion dollars. That's close to four times Uncle Sam's yearly tax income. We can't pay off the national debt all at once, not from tax revenues. Nor can we pay the debt off by selling Federal assets, because there isn't that much free capital waiting to buy them, assuming that we want to sell.
Fortunately, there is another approach to discharging the national debt. It's the same one that families use to pay off their debts.
First, you stop spending beyond your means. Shredding the credit cards is usually a good start.
Second, at the start of every month you pay the interest, and then some more. The rest of the month, you live on what is left. As time goes on, the debts get smaller. More and more of your payment is principal. Less and less is interest.
The same approach will let us solve the national debt challenge.
First, we stop running budget deficits. Rigorous application of the Presidential Veto pen can move us in the right direction.
Second, the United States already pays its 'credit card companies', the people who hold Treasury Bills, hundreds of billions a year. To end those payments, we must first increase them by a quarter or a third, and run the government on what is left. Even in four or six years, we will start to see the rewards of ending the grandchild tax--the national debt. Ending the Grandchild Tax is the most important gift we can possibly leave to our children and grandchildren.
How will ending the National Debt benefit America?
First, ending the National debt will free 8 trillion dollars in capital. Those 8 trillion dollars will be invested elsewhere, in better jobs, more effective education for our children, better living through medical research, and a more prosperous America.
Second, reducing the national debt will lower interest rates. Lower interest rates means it will be cheaper for everyone else to borrow money and invest it wisely.
Third, reducing the national debt will reduce competition for scarce investment capital. When the Federal government sells bonds, it is selling some of the safest investments in the world. Those extremely safe investments compete with non-Federal investments, squeezing American homeowners and industrial firms out of the capital market.
Fourth, moving to end the National Debt will show that grownups are now in charge in Washington. Reassuring foreigners and Americans that Washington is once again being run by grownups will bolster confidence in America.
Finally, on rare occasions catastrophes happen. The start of World War II comes to mind. A sound libertarian foreign policy will do much to avoid foreign wars, but sometimes war will happen regardless. When the national debt is lower, freedom to cope with unexpected emergencies becomes larger.
It's time to end the grandchild tax, the worst gift we can possibly leave to our grandchildren.
