The President's "Budget"

There are smarter people than me out there analyzing the budget that the President has proposed for next year. What amazes me during this entire process is the ignorance of many taxpayers - especially young people - that believe they see little wrong with this budget.

The lack of understanding of the implications of today's federal budget is based on the lack of remembering historical events and basic financial principles.

After World War I, Germany tried to lift itself out of its economic misery by printing more currency. This only resulted in staggering inflation. The following is a quote from Wikipedia referring to the period of the Weimar Republic:

Although the inflation ended with the introduction of the Rentenmark and the Weimar Republic continued for a decade afterwards, hyperinflation is widely believed to have contributed to the Nazi takeover of Germany. Adolf Hitler himself in his book, Mein Kampf, makes many references to the German debt and the negative consequences that brought about the "necessity" of National Socialism. The inflation also raised doubts about the competence of liberal institutions, especially amongst a middle class who had held cash savings and bonds. It also produced resentment of Germany's bankers and speculators, many of them Jewish, whom the government and press blamed for the inflation.

Failure to pay attention to events of the past - and the corresponding consequences - results in what we have today. The general populace believes that the president is doing the right thing by borrowing money to pay for programs now. They have no knowledge of these kinds of events happening previously and the results.

The payment of this budget is ensured by the "full faith and credit of the United States." The assumption is that today's debt will be paid in the future. How will that debt be paid? Currently, it is sold on the open market in the form of Treasury bills and savings bonds. But that principle - and interest - will be paid in the future through higher taxes. How can the government avoid raising taxes? Print more money. By decreasing the value of the dollar, apparent wages and costs of goods goes up. It now becomes easier to pay for yesterday's debt. But the value of money continues to decline and the financial effect on the average consumer will become more burdensome.

Men, young men, leaders of families, are obligated to be aware of these implications. You are responsible for your families. Not the government!

I beg you to heed the warnings of an older man.