Fuel For The Fire — It’s Tax Season Again

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It’s that time of year again….income tax season! You’ve probably heard Founding Father Ben Franklin had this to say about it: ’In this world nothing can be said to be certain, except death and taxes’, and I think this bit of wisdom nicely sums up the feelings most of us have when writing a check to the IRS each year.

It’s disheartening to see so much of your hard-earned money going straight to the government to be spent in any way our elected leaders see fit. I think for many of us, the amount of tax we pay each year might seem a lot more reasonable if government was managing our money properly, to the obvious benefit of all of its citizens.

While this may seem a noble sentiment, our government has proven time and again they’re either incompetent managing the tax revenue they demand from us, or they don’t really care about the best interests of the American people.

Perhaps they simply have a different fiscal agenda these days, one that has nothing to do with carrying out the duties and responsibilities of governing the affairs of the most powerful nation on the planet — in the most efficient way possible.

None of these reasons are acceptable.

This mind-boggling, decades long waste of public funds has to stop. According to the US National Debt Clock the national debt is $20,924,814,587,289 as of the writing of this article, and climbing at a mind-blowing rate. I’ll try to put this into perspective; During the presidency of John F. Kennedy the entire US national debt grew to 300 billion dollars — that’s the same amount D.C. pols spent in just the last few months.

I have no words.

And that’s not all. With the staggering increase of new laws and regulations in today’s business climate, the American entrepreneur (the embodiment of the American Dream and the backbone of our economy) is now forced to wade through hundreds of pages of red tape just to see a profit. If they do succeed financially they are rewarded with progressively punitive taxes — talk about ‘hamstringing’ our own economy.

In short, the government of the United States has become a juggernaut, a huge, bloated bureaucracy completely unaccountable to the constituency it was elected to serve. This growing behemoth is a major drag on our economy, and its irresponsible actions are in direct opposition of the time-tested principles the Founders looked to as they authored our constitution.

Welcome to the Machine

The governments spend billions on foreign conflicts that, more often than not, make whatever situation used as justification for going to war in the first place much, much, worse. Iraq anyone? There are also countless examples of public funds being thrown away in the most frivolous ways possible, while the amount of tax revenue wasted on useless projects and expenditures seems only to grow larger with the passage of time.

As this reckless, financial mismanagement continues, critical public works like the nation’s infrastructure is falling apart. In fact, our highway system is crumbling while our government continues to throw money into various ventures that appear to be in no way beneficial to our nation.

A cursory google search shows at least 24 bridge collapses in the US since the year 2000, at the cost of at least 45 lives. The increasing congestion on our roads has caused commute times to more than double in cities across the country. The problem is costing our economy an estimated $124 billion per year, and is expected to skyrocket as much as 50% by the year 2030.

For anyone thinking this assessment of our government’s spending is too harsh, or unfair, let’s take a little trip down memory lane to some of the more notable financial boondoggles and scandals from just the last decade or so.

  • $500,000 was spent on a campaign by the NIH to text Americans regarding the dangers of chewing tobacco.
  • $544,338 was spent by the Justice Department to ‘spruce up’ its LinkedIn profile.
  • $76,500,000 was spent by the DoD, in conjunction with the DEA, to buy an aircraft that was to be modified and used for counter-narcotics efforts in Afghanistan… but it never got off the ground.
  • $1,000,000,000 was spent by the DoD to destroy $16,000,000,000 of perfectly good ammunition.
  • $2,100,000,000 was spent on the federal government’s healthcare enrollment website according to a study by Bloomberg, and it has been a disaster.

And my personal favorite:

  • $8,500,000,000,000 in military spending since 1996 that the DoD still cannot account for to this day. That’s more than a third of our current national debt.

Now that we have had a small taste of the rampant waste and excesses inherent in the government’s mismanagement of our countries financial resources, what can be done?

The Avoidance Of Difficult Choices

The last time Congress balanced a budget was in 2001, but nobody in Washington is even talking about balanced budgets anymore, in fact, just the opposite. According the Congressional Budget Office (CBO), the $890 billion deficit forecast for the current fiscal year will rise to over one trillion dollars annually by 2020, saddling the nation with a debt of at least 33 trillion dollars by 2028.

By way of comparison, a decade ago the government borrowing a trillion dollars was an emergency measure needed to rescue the economy from the worst financial crisis since the Great Depression. Now it would seem, digging the country that much deeper into debt each year is simply, ‘business as usual.’

Most rational people would agree when you find yourself in a hole, often the best thing to do is to stop digging — but, we would be foolish to ever think of our politicians as being rational.

Leadership can either be the solution or the problem.

Have you ever wondered why, if both political parties say they’re against rising deficits, that we have deficits? Have you ever questioned the reasons why, if all politicians are against inflation, overregulation, insolvent pension funds, etc., that we have all of those things?

For me the answer is simple: Bureaucrats and politicians are the cause of the problems, not the solution to them, and to prove the point they’re telling us they intend to borrow and spend at least another trillion dollars each year for the next decade.

Respectfully, that doesn’t seem like much of a plan to me — all the more reason you’re going to want to have a real plan for yourself, and your retirement.

Takeaway

It may be true you can’t fight City Hall, but it doesn’t mean you have to stand on the tracks in the path of Washington’s out of control, runaway train, either.

If you put your ear down to those same tracks and listen, the message becomes clear: Budget shortfalls, bad policymaking decisions, and the astonishing increase in the national debt together create a problematic, long-term trend that anyone serious about retirement would be foolish to ignore.

It’s times like these where clear vision and rational thought make all the difference — and that’s where we come in.

Having a logical, well thought out plan in today’s world means considering a full range of opportunities to grow and protect your savings, as well as safeguarding your retirement assets.

It’s simply too hard to imagine there will never be some kind of economic consequences for all of this largesse.

Fortune favors the prepared.

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