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A Ward of Wall Street
Ward, definition: A minor or incompetent person placed under guardianship; custody.

Although various commentators have expressed apprehension over federal equity stakes in AIG and other financial companies, the concern in misplaced. Given the massive and diverse bailouts of Wall Street by a desperately in debt government, it would be more appropriate to discuss the investment bankers' ownership stake in Washington.

Wall Street is again earning large profits, and paying even larger bonuses, while Washington continues to demonstrate the responsibility of a staggering drunk. A recent column in, appropriately enough, the Wall Street Journal noted that last fiscal year "the final deficit tally will be about $1.4 trillion. Measured against the size of the economy, that's 9.9% of gross domestic product, bigger than any year since 1945. As a share of GDP, tax and other revenues are lower (15%) and spending higher (25%) than anytime in the past 50 years."

The WSJ also noted that when "the economy began climbing out of the deep recession of the early 1980s, federal debt...amounted to less than 30% of the nation's GDP.... At the beginning of the 1990s, it was less than 40%. Today, it exceeds 50% of GDP and is rising toward 80%, perhaps 100% of GDP over the next 10 years." The writer may be underestimating the severity of the situation as he neglected to mention the crushing unfunded liabilities of the Social Security and Medicare programs.

Meanwhile, it appears that implementing national health care could cost around one to two trillion dollars. While many people believe that if the government can pay for wars in Iraq and Afghanistan, they can also afford to ensure that everyone has health insurance, the opposite is true. Irrespective of anyone's views on military policy, the stimulus bills, and/or Wall Street bailouts, the blunt fact remains that spending large sums of money on some programs means that there isn't money to spend elsewhere.

Fiscal survival demands that Congress pass spending cuts coupled with broad-based tax increases. Moreover, just as there are strict anti-money laundering laws to prevent persons from hiding revenue sources, anti-tax laundering measures are needed to prevent efforts to disguise who actually ends up paying the necessary taxes. The illusion that people can obtain benefits without paying for them needs to be broken.

Cutting spending and raising taxes may be politically...challenging. In the absence of such measures, what can you do about America's fiscal health? Weep.

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