Why Other Fixes Don’t Work

The federal budget was last balanced in 2001. At that time, government revenues were actually greater than the amount being spent. But over the past nine years, spending has exploded while revenue has in effect, stayed the same.

That’s why the nation is dangerously in debt. Something has to be done to give Congress the will to act. We the people have the power.

Can We Grow Our Way Out?

Play video >Screenshot from videoOne Cent Solution founder Bruce Cook explains why we can’t grow our way out of the debt crisis

No. If the economy grows, the amount of tax revenue coming in to the federal government grows. But the economy is growing only at only a two percent rate. With today’s out-of-control spending in Washington, even double-digit growth over the next 10 years will not fill the gap.

Why Not Just Raise Taxes?

It won’t work. To cover the gap between spending and revenue, the lowest tax rate would have to be raised from 10 percent to 25 percent. The highest tax rate would have to increase from 35 percent to 88 percent. And business tax rates also would have to jump from 35 percent to 88 percent. An alternate European-style value-added tax, like a national sales tax, would add 18 percent to the cost of goods on top of all the other taxes we pay. Either taxing solution would cripple the economy.

Can Spending Be Cut?

The last time the federal budget was balanced was at 18 percent of the gross domestic product, the value of all the goods and services we produce as a nation in one year. Government spending is now over 25 percent of GDP, and Congress has not had the discipline to reduce spending year-over-year in the last 45 years. Everyone in Congress is for cutting spending…until those cuts impact their own districts. It will take the will of the people and an equitable solution to force Congress to make difficult but necessary spending cuts.