The State of Our Government – Part 4

by Blogger on March 26, 2010 · 4 comments

95% of the Government’s revenue is based on taxes of some kind (i.e., Individual/Corporate Income, Unemployment, Excise, etc.).  What happens as businesses scale back and unemployment rises?  Revenues decrease, because sources of revenue are drying up as a result of fewer business and individuals paying taxes.  So what else does our Government do?  They print more money and try to increase revenue by increasing taxes on those that remain.  Unfortunately, this equates to a forced investment in the Government, as you, the taxpayer/shareholder, have no input on tax increases other than with your vote!

What happens when Government continues to spend like a drunken sailor, even though revenue is decreasing?  Easy Button:  The Debt increases, thus increasing the interest we have to pay on that debt.  It is estimated the interest on our debt was more than $380 billion in 2009.  This is included in the “Intragovernmental Transfers” mentioned in the Note on the Income Statement, and interest payments account for 31.8% of all revenue received.  That’s right… 31¢ of every dollar taken in through taxes goes right back out as interest payments on the debt.  Add that expense to the Expense shown, and our actual deficit is closer to $1.682 trillion for 2009.  If not reined in, eventually the interest payments alone will exceed revenue, and we’re bankrupt.  There is no avoiding it unless our Government changes the way it does business.

The Solutions

By now your head is probably swimming with numbers.  I don’t blame you… they’re mind boggling.  However, they also beg the following questions:

  1. Can this be fixed?
  2. What will it take to fix it?
  3. How long will the fixes take?

The answer to #1 is yes, it can be fixed.

The answer to #2 is a little more complex.  The first thing we need to do is fire the Board and Officers, and replace them with people that care about all the company’s shareholders… not just those that own just a few shares of stock.  This means we clear Congress and the White House of all those that can’t (or won’t) read and/or interpret a basic financial statement… and we need to do it as soon as damn possible… before they have a chance to put us even deeper in the hole.

We must cut spending to the bone and stop borrowing immediately! You should call your representatives to Congress now, and beg them to stop the insanity!  The numbers speak for themselves, and no amount of accounting voodoo will change the eventual reality.  Make sure they know you are holding them accountable!

We also need to reevaluate our tax structure to make it more equitable for all Americans.  Everybody pays… period.  I’m not saying get rid of the progressive income tax… I’m saying reevaluate it and make it more fair.

We need to take a good look at our import/export policies and trade deficit.  Maybe it’s time to adjust some import duties.

These aren’t all the answers… but they’re a good start.  And if we don’t start implementing some of them PDQ, #3 won’t matter, because we’ll be done.  It’s going to be painful, and Government services and entitlements are going to take it in the neck.  Unfortunately, there really is no other way.

Of course, this is just One Man’s View.  Your questions and comments are, as always, most welcome.

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, Financial Statements , Government Accounting , national Debt , Taxes

{ 4 comments… read them below or add one


TracyQuast June 16, 2017 at 4:26 pm

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B April 14, 2010 at 5:56 pm


Change your text; “We also need to reevaluate our tax structure to make it more equitable for all Americans. Everybody pays… period. I’m not saying get rid of the progressive income tax… I’m saying reevaluate it and make it more fair.”

to read
‘I’m saying reevaluate it and make it more equitable’. . . fair is an arbitrary state of the weather.

That’s my input for the night. . .

You’re on target. ..


Blogger March 30, 2010 at 5:49 am

LOL… depending on how you look at it (or who you talk to), you’ll get different answers on how we got to where we are today. I think it goes back to Teddy Roosevelt, with Woodrow Wilson, FDR and LBJ as major influences. Though not as Progressive as the others, LBJ put the U.S. on MasterCard when he escalated the Vietnam War, and we’ve never recovered. How to fix it will be an ongoing discussion here.

I agree we need to get back to being a manufacturing power, but I don’t really think it will ever happen. I’m not so sure the military needs to be scaled back as much as it needs to become more streamlined and efficient. This would have to start in the Pentagon and a good hard look at our Procurement processes.

Cliff March 29, 2010 at 5:50 pm

i couldn’t agree more — i’m fairly sure you and i have different opinions on how it got this way (i feel it started back way farther than last year) or how to fix it, but we need to focus on this now as a country.

i also think americans need to start making more things and less buying things from other countries – also scale back our military (i don’t feel i’m in danger of getting invaded on anytime soon) & many many other things

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