Here Dr. Maegan Evans asks “Is Trump Right about America?”
Have we slipped into second or third place, or worse in world standings? Has America lost her greatness? Lets explore some of the looming issues we face as a country in 2016 and beyond.Unchecked spending and mountains of new federal regulations are a large part of the problem. According to the General Accounting Office (the department that monitors and audits government spending) “massive federal deficits and debt as entitlement spending and debt service will burn through 100% of tax receipts by 2030”.US Residents have more debt. As of June 30, 2015 the amount of debt held by the public was approximately $13 trillion or 74% of the average GDP over the last 12 months. This includes credit cards ($712 billion); auto loans ($1.21 trillion); student loans ($1.2 trillion) and mortgages (over $10 trillion). Debt has grown because the cost of living has outpaced income growth over the past 12 years. The average US household owes more than $129,000 of debt and pays close to $7,000 annually in interest. This is unsustainable when interest rates continue to rise.The US has the most complicated tax system in the world requiring more CPAs and tax preparers than any other country. As of 2013, it takes 73,954 sheets of paper to explain the complexity of the US Federal tax code. Over 1.2 million people (CPA’s, lawyers and consultants) help prepare tax returns annually. The United States is one of two countries in the world that taxes its nonresident citizens on worldwide income, in the same manner and rates as residents; the only other country isEritrea. The US also has the highest corporate tax rates in the world.The US has the most laws of any country with more being passed annually at a much higher rate. No one knows exactly how many laws there are since they’ve been accumulating for over 200 years. For example, there were over 40,000 new laws passed in 2011 including local, state and federal.The US spends more on the military than any other country. This averages 20-25% of the entire federal budget. Every hour US taxpayers are paying $8.3 million for debt of the total cost of wars since 2001. (Afghanistan 2001-2014: Iraq War 2003-2011; Afghanistan War 2015-present and the international campaign against ISIL (2014-present.) The USA outspends China, Russia, UK, France, Japan India, Saudi Arabia and Germany combined on defense. However, China actually has more troops than other countries (known as the Chinese Liberation Army.)The US spends more on healthcare as a percentage of GDP. Obamacare alone will add $1.8 trillion to the national debt by 2024. According to the World Health Organization (WHO), the United States spent more on health care per capita ($8,608), and more on health care as percentage of its GDP (17.2%), than any other country on earth. Rising healthcare costs, the aging population and uncertainties about the efficacy of Obamacare will add significantly to the fiscal woes of our country.The US has the largest national debt and trade deficit. As of June 4, 2015, total U.S. debt stood at$18.830 trillion. Washington spent nearly $3.5 trillion in 2014 while collecting approximately $3 trillion in revenues, resulting in a deficit of slightly less than half a trillion. In other words, 14 cents of every dollar that Washington spent in 2014 was borrowed. Over the past 20 years, federal spending grew 63 percent faster than inflation.Total federal revenues in fiscal year 2015 are expected to be increased to $3.18 trillion. These revenues come from three major sources and it won’t be enough:
- Income taxes paid by individuals: $1.48 trillion, or 47% of all tax revenues.
- Payroll taxes paid jointly by workers and employers: $1.07 trillion, 34% of all tax revenues.
- Corporate income taxes paid by businesses: $341.7 billion, or 11% of all tax revenues.The federal government’s 2015 budget deficit will fall slightly this year to $468 billion which is the highest in the world. By 2025, the Congressional Budget Office projects a $1.1 trillion annual deficit or 4% of GDP unless Washington takes steps to reduce deficit spending.The US has more regulations than any other country in the world. Over the past decade, the federal government has issued over 40,000 new final rules (regulations).The burden of regulatory compliance cost to American citizens and businesses is approaching $2 trillion dollars annually (U.S. Chamber of Commerce).According to the Census Bureau, there were 105,862,000 full-time year-round workers in the United States — including 16,685,000 full-time government workers in 2011. These full-time workers are outnumbered by the 109,631,000 whom the Census Bureau says are currently receiving government benefits.
The United States spends more than other developed nations on its students’ education each year, with parents and private foundations picking up more of the costs than other developed countries. Despite the spending, U.S. students still trail their rivals on international tests. The total cost per student of public education in 1970 was $57,602. It is close to $175,000 today.
The US ranks 12th in the Index of Economic Freedom trailing far behind the top three: Hong Kong, Singapore and New Zealand. Economic Freedom indicators include: rule of law, limited government intervention in the private sector, regulatory efficiency and open markets (Heritage Foundation and the Wall Street Journal.) Clearly the USA is not the freest country in the world when it comes to generating wealth, personal freedom and avoiding the heavy hand of Uncle Sam.So what still sets America apart as the greatest nation on earth given these dismal statistics and forecasts? We are still very much a country of visionaries, entrepreneurs and risk takers. We just need to have the freedom to explore the possibilities and not continue to be buried in a bureaucratic and regulatory grave yard. Is Trump right about the US? You decide.