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U.S. Representative Todd Rokita
Your Freedom, Your Family, Your Future
Imagine A Company
• ... With NEGATIVE cash flow for the past 9 years – and the majority of the last 50 before that
• • ...NEGATIVE Net Worth for
as long as anyone can remember
• • ... Needs 20 years of
income to pay off its existing debts
• • Would You Invest?
Budget Deficits as a Percentage of GDP, by Administration
“Debt Day”
Source: Office of Management and Budget, President’s Budget FY 2012
All spending after July 27 of this year is borrowed spending.
THE FEDERAL GOVERNMENT IS BORROWING MORE THAN 42 CENTS OF EVERY DOLLAR IT SPENDS
Source: Office of Management and Budget, President’s Budget FY 2012
We’ve borrowed and have held debt in the past…..why is it a problem now???
Source: Congressional Budget Office, Office of Management and Budget
America’s Foreign Debt Reality
With the interest we pay to China on our debt, China can afford to buy 3 new Joint Strike Fighters every week – with $50 million/week left over.
Source: U.S. Department of Treasury, Government Accountability Office
TAKE A CLOSER LOOK
1941 1947 1953 1959 1965 1971 1977 1983 1989 1995 2001 2007 2013 2019 2025 2031 2037 2043 20490%
50%
100%
150%
200%
250%
300%
Tidal Wave of DebtDebt Held by Public as
Share of EconomyCURRENT POLICY
2011WWII
Source: Congressional Budget Office, Office of Management and Budget
THE COST OF WAITING – THE FISCAL GAPUNFUNDED PROMISES IN TRILLIONS OF DOLLARS
2009 2010 20110
10
20
30
40
50
60
70
80
90
$62.9 Trillion
$76.4Trillion
$88.6Trillion
IN T
RILL
ION
S O
F D
OLL
ARS
SOURCE: GAO
FALSE SOLUTIONS
1.) Taxing the Rich2.) Cutting the Stuff we don’t like3.) Cut Defense
FALSE SOLUTION #1
• THE PROBLEM OF JUST TAXING THE RICH• 1.)The top 1% of taxpayers, those with salaries, dividends, and capital gains roughly
at $380,000-----paid 38% of taxes.
• 2.)Suppose you tax all the billionaires and millionaires at 100%...you confiscate all their taxable income….even this only yields about 900 Billion, which is a drop in a bucket amid a 4 trillion dollar budget, and a 1.65 trillion deficit.
• 3.)The top 10%, or everyone with income over $114,000, including joint filers,
already pay 69% of all total income taxes. • The reality is that in the absence of entitlement reform, WASHINGTON will need to
tax the MIDDLE CLASS even more…because that’s where the big money is.
• And even if the middle tax is taxed more, it still won't pay the debts due to be incurred in the future under current spending plans.
Source: Office of Management and Budget Historic Tables, Congressional Budget Office; projections based on the CBO’s Alternative Fiscal Scenario.
1947 1952 1957 1962 1967 1972 1977 1982 1987 1992 1997 2002 2007 2012 2017 2022 2027 2032 2037 2042 2047 2052 2057 2062 2067 2072 2077 208210
20
30
40
50
60
70
80
We Are In A Spending-Driven Debt CrisisHistoric/Projected Spending & Revenue
As A Percentage Of The Economy
Spending Tax Revenue
FALSE SOLUTION #1
FALSE SOLUTION # 2
FALSE SOLUTION # 3
Solutions that Work• Medicare:• Transfer from a defined benefit, fee-for-service structure to
a defined contribution structure, and require an aggressive means test. It offers:
• CHOICE• COMPETITION• PATIENT CONTROL• FREE MARKET PRINCIPLES• LOWER COSTS• NO CHANGES FOR CURRENT BENEFICIARIES
• Social Security:• Index the normal age retirement (NRA) to longevity
standards, and require an aggressive means test. It offers:
• COMMON SENSE APPROACH• GRADUAL INCREASE• SOLVE LONG TERM SHORTFALL
•
More Solutions that WorkAnother Solution: Grow The EconomyHow do we do this?1.) Lower Taxes2.) Deregulate Business3.) More Domestic energy productionResults: HIGHER PERCENTAGE OF GDP GROWTHConclusion:--Growing our economy beyond the average rate, combined with other reforms, would reduce our debt faster.--The best way to do this is by:1.) Lowering taxes and simplifying the tax code2.) Removing job killing regulations and overzealous bureaucracies from the private, productive sector of our economy3.) Producing more domestic energy
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