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Party Lines: Deficit: What should be done?
by Ben Horsley
Jul 23, 2011 | 1497 views | 0 0 comments | 9 9 recommendations | email to a friend | print
A Ponzi scheme is defined as a “fraudulent investment operation that pays returns to separate investors, not from any actual profit earned by the organization, but from their own money or money paid by subsequent investors. The scheme entices new investors by offering returns other investments cannot guarantee, in the form of short-term returns that are either abnormally high or unusually consistent. The perpetuation of the returns that a Ponzi scheme advertises and pays requires an ever-increasing flow of money from investors to keep the scheme going.”

Most of us think of Ponzi schemes victims as gullible suckers who were born to part with their money over “too good to be true” returns. However, all of us are party to the largest Ponzi scheme in the world whether we realized it or not.

Many times in the past, I have discussed the impending problems that stem from the lack of fiscal prudence on the part of our Congress and President.

Not only have we been on an unsustainable trajectory with regards to our budget deficit, but also our national debt is over $14 trillion dollars, which is around $46,000 for you and each member of your family. This problem is non-partisan and cannot be resolved using the types of tactics and “leadership” that have been demonstrated by our President and Congressional leaders.

The President acknowledged on the campaign trail that cuts needed to be made. Yet here we are still waiting for action almost three years after he was elected.

The President has also acknowledged the need for changes in our entitlement programs. My senior citizen friends should relax and not give into the fear mongering the other side has cited when it comes to these needed entitlement changes. No mainstream republican proposal has ever indicated cutting benefit levels for current beneficiaries.

However, social security is a Ponzi scheme plain and simple. Read the definition again and tell me how it isn’t a Ponzi scheme. Congressman Rob Bishop used to joke that Utah was the only state working to solve the problem with entitlements since we have way more kids per capita than any other state. Unfortunately, it’s an unsustainable scheme that has run its course and the reality is not very funny.

Our nation’s credit card has maxed out. Instead of raising the limit, we need wholesale changes to entitlement programs and discretionary spending. I don’t believe any citizen of this nation should forego any responsibility for this mess with the exception of our children.

The President has discounted a balanced budget amendment citing the need for Congress to do its job. Unfortunately, it’s a complete abdication of responsibility by Congress. They have never and will never do their job.

In addition to these changes, it’s time for a major structural shift in our system of taxation. It is time for a flat tax or a national sales/consumption tax. We need a simple constant rate with no more deductions and tax shelters. We need the 46 percent of Americans who are not paying federal taxes to do their part. Not only would this be fair, it would significantly improve our revenue and eliminate unnecessary government regulation and administration.

Despite what the President and Congressional leaders think, real leadership is addressing the heart of problems and making tough decisions that are sometimes unpopular. We are way past due for some real leadership on these issues.





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