Last week I delved into my household conflict of wanting a new truck. I easily could have “afforded” a new truck by borrowing the money with financing over 72 months. My wife, the more sensible one when it comes to my spending, highlighted that given our long-term plans, it did not make sense to borrow money for things that we want but do not need. We made the responsible decision to forgo spending today, so that we would have more resources in the future.

Unfortunately, the U.S. Congress has lost touch with the reality of wants versus needs when it comes to spending. And why not? It is easy to pass legislation increasing the debt limit when the citizens responsible for paying back the debt are not yet old enough to vote. In fact, many of them have not even been born yet.

For years, the Republican Party stood on a platform of deficit reduction; Tea Party members aligned and promised to get spending under control. Based on that promise, voters gave them control of the Congress. Last month, that same group voted to increase the deficit through tax reform. In a separate vote, they increased the debt ceiling so that the government could keep spending.
Democrats, on the other hand, who were in control during the largest deficit spending since World War II under President Obama, banded together against lower tax rates and pointed to the problem of the rising deficit.

How big is the problem? Estimates are that the deficit will exceed $600 billion in the current fiscal year. Worse yet, the Congressional Budget Office reported last July that the budget deficit will continue to rise over the next decade.

The report suggests that “growth in revenues would be outpaced by growth in spending for large federal benefit programs and for interest payments on the federal debt.” Three decades from now, the CBO projects that U.S. debt will be twice as high relative to GDP as it is now, and at “a higher percentage than any previously recorded in the nation’s history.”

In short, we spend more than we take in and will continue to do so into the foreseeable future unless our leaders create change. The solution, though by no means simple, is a combination of more revenue through economic growth coupled with higher taxes AND reduced spending.

Given the state of today’s partisan political culture, it seems highly unlikely that spending will be cut or tax collections will go up. For that reason, I apologize in advance to my grandchildren, Hattie, Liam and Frances. Our current political leaders, most of whom you will never read about in history books, are more interested in what party is in control of the government than what your future will hold.

Government of the people, by the people, and for the people, should include those not yet old enough to vote. #ThemToo

Jamie Boulette, CPA has 30 years of tax experience and is managing director of Perry, Fitts, Boulette and Fitton CPAs with offices in Bath and Oakland. He can be reached at [email protected] or 371-8002.

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