Nominally it falls tomorrow. But to cover just this year’s federal spending, taxpayers would have to turn all their earnings over through May 23.
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The Tax Foundation, which estimates Tax Freedom Day, acknowledges the problem. Since 2008, observes the Foundation, “deficits have been massive by any measure, and as a result, Tax Freedom Day may give the impression that the burden of government is smaller than it is. If the federal government were planning to collect enough in taxes during 2011 to finance all of its spending, it would have to collect about $1.48 trillion more, and Tax Freedom Day would arrive on May 23 instead of April 12.”
That revised TFD would set a peacetime record. You have to go back to World War II to find a time when the U.S. government spent a larger proportion of the economy. And World War II was the greatest conflict in human history. A little “kinetic military action” in Libya for who knows what purpose doesn’t come close.
Unfortunately, there is little reason for optimism about the future. The congressional Republicans originally proposed to cut $61 billion from this year’s expenditures, about 1.6 percent. Now they’ve settled for $22.5 billion less.
House Budget Committee Chairman Paul Ryan has offered a thoughtful long-term plan that would make major reductions in entitlements as well as discretionary spending. But its political future is, to put it kindly, uncertain. It won’t go anywhere with a Democratic Senate and president. It might not go anywhere even if the Republicans win control of both ends of Pennsylvania Avenue next year.
The current budget numbers look frightening enough. But more spending is inevitable. Fannie Mae and Freddie Mac continue to lose money. The Federal Housing Administration is insuring more problem mortgages than ever. The FDIC continues to close banks. The Pension Benefit Guaranty Corporation continues to take over the pension plans of failed businesses. All of these and many other bills will eventually come due.
The Obama administration has got America into its third unnecessary Middle Eastern war in a decade. With military forces still occupying Iraq eight years later and still fighting in Afghanistan nearly ten years later, who knows how long the U.S. will be stuck fighting, occupying, and reconstructing Libya. War is just another Big Government program with an equally large unfunded liability.
Then there’s Obamacare, assuming it is not repealed by Congress or overturned by the Supreme Court. By one estimate the legislation imposed an unfunded liability of over $13 trillion. No one knows for sure, since the official estimates were fudged by Congress. Permanent, non-political officials at the Centers for Medicare and Medicaid Services have repeatedly said, ever so politely, that the Democrats lied about the numbers. The Medicare cuts that were necessary to fund the program simply aren’t going to happen: they are “very unlikely to be viable indefinitely,” under the new reimbursement rates providers “would eventually be unwilling or unable to treat Medicare beneficiaries,” and projections based on these changes “are very likely to seriously understate actual Medicare costs in the long-range future.”
Finally, there are the unfunded liabilities for Social Security, Medicare, and Medicaid. The federal government only develops an estimate for the first two, and their combined future red ink came to $107 trillion in 2009, the last reliable estimate. Medicaid is on a similar trajectory. Left unchanged, these three programs alone will eventually destroy federal finances. Yet even many avid members of the Tea Party don’t want to touch what they see as “their” benefit programs.
The fiscal train wreck is approaching. “The federal budget is on an unsustainable path, because federal debt will continue to grow much faster than the economy over the long-run,” warned the CBO. Looking ahead just a decade, the agency reported: “To keep annual deficits and total federal debt from reaching levels that would substantially harm the economy, lawmakers would have to increase revenues significantly as a percentage of GDP, decrease projected spending sharply, or enact some combination of the two.”
Indeed, after the coming tsunami of spending, deficits, and debt, one hates to imagine the date of future Tax Freedom Days. Will there even be a tax freedom day? Maybe taxpayers will face the ultimate simplified tax form of just two lines: “1) How much did you earn? 2) Send it in.”
With the president and Congress attempting to provide a full service global welfare state, the IRS is likely to become a little like the Eagles’ Hotel California, where you can check out but never leave. You will be able to earn money, but never spend it. After all, everything you own was long ago promised by Uncle Sam to someone else.
A man of faith in a godless age is hitting Americans where it hurts.
Mr. and Mrs. American Spectator Reader, let P.J. O’Rourke talk sense to your kids.
In Britain, defending your property can get you life.
The debacle of this president’s administration is both a cause and a symptom of the decline of American values. Unless Congress impeaches him, that decline will go on unchecked. An eminent jurist surveys the damage and assesses the chances for the recovery of our culture.
It won’t take long for conservatives to scratch this presidential wannabe off their 2008 scorecard.
The American Christmas, like the songs that celebrate it, makes room for everybody under the rainbow. Is that why so many people seem to be hostile to it?
Was the President done in by the economy, or by the politics of the economy?
H/T to National Review Online