What it will take to get our nation’s finances back in order

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What it will take to get our nation’s finances back in order
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CLARKONOMICS: About a year or more ago, I went crazy on the air and talked about how we’ll become a Third World country if we don’t get our fiscal house in order. People thought I was too strident, too emotional and too unreasonable. I had to apologize twice during my Clark Stinks segment.

Now we have word that Standard and Poor’s has issued a warning that the United States could have its AAA debt rating (the highest possible) downgraded within the next 2 years. This is a big deal.

We as a country — not as Democrats, Republicans or independents — have to show that we love our nation enough to forgo scoring political points and instead do what it takes to bridge the gap between spending and taxes. We have to get it done if we want to get our nation’s financial house in order and maintain our top-tier debt rating.

Every day on my show, we see the consequences of excessive spending and borrowing in people’s lives. We know how that can be a real train wreck. But our nation’s train wreck is coming because we’re not realistic about the cost of Medicare, Medicaid and Social Security.

I saw a new ABC News/Washington Post poll of 1,000 voters that asked the following: “In order to reduce the national debt, would you support or oppose…”

  • Medicare spending cuts? Roughly 20% were in favor of it and roughly 80% opposed it.
  • Medicaid spending cuts? Some 30% were in favor of it and roughly 70% opposed it.
  • Taxing those who make more than $250,000 annually? Roughly 70% were in favor of it and roughly 30 percent opposed it.
  • “Raising taxes on all by a small percentage and making small reductions to Medicare and Social Security?” as the poll phrased it. Approximately 45% were in favor and roughly 55% opposed it.

Let me say this: You could tax all the wealthy on 100% of their income and you still couldn’t close the budget gap if you continue providing the level of benefits we do now going forward. I know it makes good politics to talk about how much you’ll increase taxes on billionaires. But even if you wiped out their billions, you wouldn’t make a dent in our nation’s multi-trillion dollar obligations. The reality is the whole situation requires a major rethink in order for us to balance the books of our nation.

America did not become the great country it is with a lack of sacrifice. And this is a time that requires sacrifice. We’re all good at talking about the sacrifice of the brave men and women in our armed forces. We may applaud them at airports for what they’ve done overseas. But that’s not a shared sacrifice, that’s just a tiny sliver of very courageous Americans doing it.

In the past, during times of great challenge, we’ve shown resourcefulness as a people and a shared national vision of what it takes to forge ahead. Right now, we lack that shared vision and any commitment to present sacrifice for long-term gain. Yet we need to get there and that will require a wholly different attitude from the politicians in Washington.  

Now I know the first job of every politician is to get re-elected. But think about this: When you drive by a road or a school named after some politicians, chances are you have no idea who it is. Feathering your own nest as an elected official is not nearly as important and if you get re-elected is insignificant in U.S. history. What really matters is that we together face the music and get the country back on firmer footing.

Ultimately, that’s a conversation that’s outside the normal realm of my radio show. So let me bring it back to you. Here’s what you need to focus on: At some point, we will each receive less of the nation’s income to provide for our old age and health care. The burden will be shifted back to the individual again. The responsibility starts with us to make smart choices throughout our working lives to save more money so that — regardless of what goes on in Washington — we put ourselves on firmer footing.

If you look back at American history, we’ve really only had ourselves, our families and our friends as support systems in illness and old age. Yet now we’re in a situation where we’ve spent decades saying that it’s the government’s responsibility…and the government was only too happy to play sugar daddy. But now the sugar daddy ran out of sugar. And you will have to provide you own sugar going forward!

I’m not saying this to be mean or harsh, but as a call to action to get your own finances under control.

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Clark Howard About the author:
Clark Howard is a consumer expert whose goal is to help you keep more of the money you make. His national radio show and website show you ways to put more money in your pocket, with advice you can trust. More about Clark
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