Background: Over the last ten years, federal government spending has been at a higher level than it’s ever been in American history. In fiscal year 2015, the federal government spent a total of nearly $3.7 trillion or almost $30,000 per U.S. household. This runaway government spending leads to yearly deficits in which the government spends more than it takes in, resulting in the buildup of the national debt.
While some politicians blame the rise of the national debt on lower taxes, the problem is clearly irresponsible federal spending. Federal revenue totaled $3.2 trillion last year – the highest amount of revenue the government has ever collected in American history. We cannot tax our way out of this financial hole.
President’s Fiscal Year 2017 Budget Proposal: Despite this troubling financial reality, President Obama refuses to address the problem. Instead, his FY 2017 budget proposal calls for an increase in federal spending to the tune of $4.1 trillion that never balances. To pay for the additional spending, the President proposes an astonishing $2.6 trillion in tax increases (on oil, capital gains, estate and gifts, healthcare, and more) over the next ten years.
Problem: Excessive federal spending translates into higher taxes on American families and businesses that have less to save, invest, and spend as a result. This makes it harder for American families to save for and buy a house and harder for businesses to invest in the real estate market.
Excessive federal spending also translates into higher debt. High federal debt puts our country at risk for a number of harmful economic consequences, including slower economic growth and a debt-driven financial crisis. Too much federal debt can result in higher interest rates on government bonds leading to higher rates on mortgages, increased inflation that destroys savings, and a crowding out of private investment. Higher interest rates and higher inflation will force American families to delay buying a house or not buy one at all. Less private investment will shrink the financial and housing market, making it increasingly difficult for real estate agents to earn a living.
Solution: To solve this growing financial crisis, Congress must act now to cut both discretionary spending and mandatory spending. Unnecessary federal programs should be eliminated, entitlement programs must be reformed, and taxes – especially ones which discourage work, savings, and investment – should be cut or eliminated in order to spur economic growth.
Realtors and real estate agents rely on a stable and growing economy to buy and sell real estate.
Congress and the President must work together to rein in excessive government spending and lower debt that threatens economic growth. Lowering government spending and debt will boost long-term economic growth, increase savings, encourage investment, and create jobs. This is the kind of economy realtors and real estate agents will be able to not only survive in, but flourish in for decades to come.