American is collecting record tax revenue. Yet we are falling more deeply into Debt each year.
Why? Entitlements and Debt servicing.
A large part of domestic spending is for entitlements, which many (except politicians) recognize are not sustainable. Entitlement spending is redistribution. The goal of entitlement spending is to reduce the income gap. In reality it does the opposite, which is why the income gap always increases under Democrat administrations. (Why the GOP never points this out is an unknown…)
An enormous amount of entitlement spending is redistribution to fight poverty. Since LBJ’s Great Society in 1964, we have spent over $14T on anti-poverty programs, but have not reduced the rate of poverty even 0.1%. (We know what doesn’t work – but we keep doing more of it.)
Our Debt? $17T.
Anti-poverty spending? $14T – for zero result.
What is the best anti-poverty program? Jobs.
How are jobs and redistribution linked?
People look at the size of the Debt, find numbers that large meaningless, and ignore it. Bad idea. For the Debt is not some huge future number. It creates a negative impact on the job market every day.
The cost of creating a job in America is about $90,000. The National Debt servicing cost in 2013 was $415,688,781,248, or $1,889,494,460 per workday (220/yr). Do the math. The servicing of the Debt in 2013 meant that 20,994 jobs PER WORKDAY were not created. That’s 4,618,680 jobs NOT created annually just to service the Debt.
A large debt is not just some amorphous future un-payable number to be ignored during one’s lifetime. It is destroying job creation now.
That Debt is created, in large part, by redistribution that is destroying jobs
Some will say – no, the interest on the Debt is paid to folks holding the T-Bills, and goes right back into our economy.
Nope. About half our debt is held overseas. None of that goes back into our economy. And for the half held domestically? A waitress in Moline pays taxes that are used to service the Debt by paying interest to a Hedge Fun.
Is that hedge fund creating jobs in Moline, or creating “Green” jobs for Solyndra? Or fleeing the country to seek lower taxes elsewhere?
Here’s the cycle: Taxes on the waitress -> Redistribution -> Debt -> Taxes on the waitress -> Interest -> redistributed to holders of T-Bills.
Net? Redistribution enlarges the income gap. Not a lot of waitresses in Moline with T-Bills in their accounts…