I have too big of a home. I have too many cars. I save too much money. You may be in the same situation, also. Why? Because our federal taxes are low enough that we have money to apply to nice homes, cars and savings. Why are our federal taxes too low? Because they have not kept up with federal spending. If taxes matched federal spending, we would see much larger chunks of our paycheck going straight to the IRS. Back in the early 1980s when the federal deficit first caught my attention, I thought, the $5,000 owed by each American on the deficit was manageable with fiscal discipline going forward. At this time, with debt approaching $40,000 per person, I have little hope we can dig ourselves out of this debt hole.
While expressing a concern with the federal deficit over the years, I have always tried to be upbeat on the government coming to its senses and attacking the problem. Not anymore, the problem now has a life of its own. The problem will be merciless in raising taxes and reducing spending - something politicians have not and will not do to become fiscally responsible. It is most likely too late to stave off rampant inflation and possible debt default as a nation.
Right now, the federal government officials are worried about deflation, not inflation, because of the recession. As the government prints more money, inflation will start to rear its ugly head. As the world flees from the dollar and our creditors stop investing in our debt, this will make our plight even worse.
Unlike my situation stated above, some of you are renting, driving an old car and don't have enough left over after bills to save much, if any, money. The massive debt machine will not be kind to you either. I really don't want to pay more federal taxes, but circumstances out of anyone's control will dictate we all pay more in the coming years.
In spite of this, we live in the greatest country on earth. We have not been good caretakers of our economy, though. We have some very challenging times ahead. Hang on.
R. Douglas Reeder
Vincent, Ohio
