Capps Rant October 28, 2013

1. Capps Rant October 28, 2013 From 2007 to 2013, annual government expenditures have grown from $2.7 trillion to $3.7 trillion, an increase of 36.3%. Because a large part of government spending must be borrowed, US Government debt has increased from $5 trillion to $12 trillion, up 120%. It is the Fed that has enabled the government to increase the total debt in six years by more than that accumulated since George Washington.

2. From 1991 to 2001, the average interest rate on government debt was 6.6%. Currently, it is about 2.2%. When interest rates return to normal, the interest on the federal debt will triple from today’s rate and will be well over $1.0 trillion. Let that sink in! The population is 317 million. Just the interest alone will be more than $3,000 per person. There are about 140 million tax returns filed every year. Only about 80 to 90 million pay any tax. But even worse, many of these are tax frauds by illegal aliens.

3. For some reason, some people get an ITIN, an Individual Taxpayer Identification Number, from the IRS. Would you not be surprised that illegal aliens use an ITIN instead of a social security number to get refunds? If you were an employee at the IRS, would you be suspicious if a large number of refund checks went to ITINs at the same address? Would you be more than a bit suspicious if 23,994 tax-refund checks went to those with ITINs at one address in Atlanta? At any rate, the US national debt is now a few dollars short of $17 trillion. But throw in Social Security, Medicaid, Medicare and other liabilities and the liability is over $1 million per taxpayer.

4. Debt is growing faster than the population. Many in Congress, and many ndividuals, do not understand that the rate of growth of debt is greater than the rate of growth of population, taxpayers, the economy, or national income. Some otherwise intelligent people believe in the Keynesianconcept of stimulus. That is, debt problems can be solved by more debt and spending. That is one of Keynes’ most ludicrous and dangerous notions. Some in Congress understand that this crisis is digging a deeper hole, but they believe the crisis will not occur for many years, and by then they will be retired and set for life.

5. What this means to you as an individual is that the unprecedented intervention of government into the private economy has created a myriad of situations of uncertainty. When an individual or a corporation makes an egregious mistake, the consequences are limited. When the government does so, with great hubris and arrogance, as most every government throughout history has done at some point, the effects are huge and far reaching.