Julie and I want to thank you for the encouragement that we have received from so many of you. We know that this will be a challenging endeavor, but we firmly believe that both political parties have put the economic future of this country at risk.
This week, Standard & Poor’s issued a warning that it may downgrade our country’s credit rating over concerns about our ability to balance our national budget. To put the problem into perspective:
- The national debt is currently $102,000 per taxpayer.
- This number will grow by $11,500 during 2011 due to the deficit.
- The 2011 spending cuts approved earlier this month only reduced spending by $2.50 per taxpayer.
We need leaders who will make the difficult decisions to restore fiscal responsibility. For too long we have allowed our politicians to divide our country over partisan issues. We have a moral obligation to eliminate the national debt; doing otherwise amounts to stealing money from future generations.
To do this, I propose that we dedicate a minimum of 1% of our nation’s economic output to debt reduction every year. Dedicating 1% will completely eliminate the debt in roughly 40 years, the longest time horizon that I believe is justifiable.
History shows that government revenues have stayed nearly constant at 18% of the economy regardless of tax policies. In other words, our revenues are not likely to exceed $2.6 trillion in 2012 whether we raise or lower taxes. While tax reform is needed, the real problem is too much spending. If we are ever going to eliminate the debt, we will have to cap federal spending at 17% of the economy (or roughly $2.4 trillion in 2012) until the debt is paid off.