Can we afford to defend America without going bankrupt? | Fox News

Russia and Ukraine. The Middle East. And what if China invades Taiwan?

No, America doesn’t have the Avengers, and we can’t be in all places in the world at the same time. But there is a much deeper and looming problem we face that no one seems to be talking about.

According to the US National Debt Clock, the interest we pay each year on the money we borrow from ourselves now exceeds the money we spend each year in the budget to defend the United States of America.

A man walks past the National Debt Clock on 43rd Street in downtown New York City, February 15, 2019. The debt has now surpassed $35 trillion. (Getty Images)

If we are not careful, it is only a matter of time before net interest on the debt becomes the largest item in our country’s budget.

STOP THE MADNESS. OUR NATIONAL DEBT IS NOW ABOVE $35 TRILLION…

How did we get here?

Simply put, the national debt is akin to using credit cards for your incessant spending woes at Amazon and Whole Foods and not paying off the full balance every month.

Credit card debt is a growing problem in America, but the principle of accumulating debt remains the same as in America. The costs of purchases are higher than the income we bring in and that results in a shortage. The accumulated deficits over time represent a person’s total debt.

Notable recent events that have led to large spikes in debt include the wars in Afghanistan and Iraq, the Great Recession of 2008, and COVID-19. From FY 2019 to FY 2021, expenses increased by approximately 50%, largely due to the COVID-19 pandemic. Tax cuts, stimulus programs, higher government spending and lower tax revenues due to widespread unemployment were responsible for the sharp increase in the national debt.

At the end of 2023, the country’s gross debt was almost $34 trillion and now, at the end of 2024, we are approaching $36 trillion. Of that amount, about $27 trillion, or 79%, was debt held by the public – which amounts to cash borrowed from domestic and foreign investors.

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The remaining seven trillion dollars (21%) was intragovernmental debt, which simply records transactions between one part of the federal government and another.

Can this be resolved?

Let’s start with the big lie: “The rich don’t pay their fair share.” This rhetoric has been used in many elections and is now being brought to the forefront by Kamala Harris, who says that wealthy people pay the same tax rate as the “working class.”

Here’s how this idea of ​​”the rich pay lower taxes than the middle class” came about as a talking point. Forbes published an article in 2021 stating, “400 (richest families in America) paid an average income tax rate of 8.2% between 2010 and 2018.”

The study, by economists Greg Leiserson of the Council of Economic Advisers and Danny Yagan of the Office of Management and Budget, used annual “Forbes 400” lists and public data to estimate the incomes and federal income taxes paid by members of those elite group were paid. This is the smallest sample size, measuring the 400 richest people in America.

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Saying that the rich aren’t paying their fair share is good… misinformation, as the Democrats would say. Here are the facts:

• Personal taxes account for 48% of government revenues
• Payroll taxes account for 33% of government revenues
• Corporate taxes account for 10% of government revenues.

The National Taxpayers Union Foundation’s 2021 data showed that the top 1% of earners filed an average tax rate of 26.3% of adjusted gross income (AGI) and paid 45.8% of all federal income taxes.

On the other hand, according to H&R Block, the tax rate for $50,000 of taxable income in the 2023-2024 tax year is 12.6%. That means the “wealthy (the top 1%)” pay a 100% higher tax rate than the average middle class in America? Does that seem fair?

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But this is the tax deception we see Democrats telling Americans about tax rates versus actual taxes paid. This does not include state taxes, local taxes, payroll taxes and real estate, which would make these figures even higher.

The challenge to solving this problem is that only the rich can actually solve part of this equation, because you can’t get blood from a stone. That’s why Social Security may inevitably become a Medicare-like tax and why eventually capital gains tax rates and ordinary income tax rates will go up.

On the other hand, with government spending spiraling out of control, there is absolutely no doubt that we need to decide on the other side of the ledger where cuts need to be made to effectively balance our budget.

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Will we be able to defend America?

Actions have consequences. Just like these elections. There is absolutely no doubt that Congress will be forced to raise the national debt ceiling soon and that our national debt will reach $40 trillion within the next two years. Interest on the national debt will soon cost us more than $1 trillion a year fiscally.

If the war in Ukraine, the war waged by Iran and its allies, the war on the border, and who knows what’s next doesn’t scare you, you should be concerned that we may not have enough money to pay for our to build its own future fleet. of Iron Men, based on the budgets we put in place today to defend our country and our leadership position around the world. Maybe it’s time we started taking our national credit card debt seriously.

CLICK HERE TO READ MORE BY TED JENKIN