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What we have is a spending problem

Published: December 15, 2012

Some laws can't be broken. The laws of physics and economics are perfect examples. If a man could break the law of gravity, if he jumped he would go up forever. In economics, Hauser's Law to date has never been broken because the law forces spending back to reality. Hauser's Law says that regardless of how high tax rates go, revenues to the government won't exceed about 18.5 percent of gross domestic product. The federal government is currently spending 25 percent of GDP and although revenues to the government are rising under the current tax rates, they can't rise as fast as current spending. So what we have is a spending problem!

Raising taxes on the rich can't possibly increase revenues to 25 percent of GDP, so the only alternative is to reduce spending by $1.3 trillion per year to about 18.5 percent of GDP. The current petty bickering in Congress over a measly $60 billion tax on the rich has no value in the real world; it's merely a pebble on a very large beach.

The proposed trivial spending cuts over the next 10 years — a period in which (including Obamacare) the debt is expected to rise $13 trillion to $29 trillion, more than the total GDP of earth — have no meaning. The best solution is the obvious first alternative in good decision making: Do nothing! The creditors of the U.S. debt will end the spending sooner than later. Hauser's Law will prevail!

Douglas C. Tate, Elk City

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