I am writing in hopes that you might help give this issue the attention it deserves. I believe a key story in the U.S. 2008 Presidential Election should be the fact that all of the candidates seem to be dancing around what is, perhaps, the most crucial issue facing America. That issue is government finance.

I am referring to the simple fact that the financing of U.S. government operations (i.e. with a federal budget of almost $3 trillion, public debt of over $9 trillion, and future entitlements and mandatory spending obligations that probably approach $100 trillion) is causing a "domino-effect" of financial disaster; as financial pressures are cascading down on state and local governments to ultimately rest on the shoulders of individual taxpayers.

The solution is to give taxpayers more direct involvement in the budget and tax process through, perhaps, an annual referendum to establish basic budget and tax restraints in accordance with the will of the American people. The bottom line is that budgets need to be drastically slashed and efficiencies need to be dramatically improved. Deficit spending must stop.

Otherwise, Congress will just keep spending money they don't have; no matter who becomes President. These deficits will ultimately become unmanageable and they will paralyze American enterprise; a process which has already begun (see the facts and circumstances listed below).

Even a first-grader knows that you can blow up a balloon only so big before the pressure makes it burst.

Regards,

Edward H. Smith
American Voters for Fiscal Reform
edsmith@ehsreports.com
www.ehsreports.com
(603) 935-8809

Some key facts and circumstances:

1. The U.S. proposed budget for fiscal year 2008 is over $2.9 trillion; with mandatory spending (Social Security, Medicare. Medicaid, SCHIP, Unemployment, Welfare, and other mandatory obligations) accounting for $1.53 trillion of the budget; and discretionary spending (Defense, War on Terror, Health and Human Services, Education, Veteran's Affairs, Housing and Urban Development, State and International Programs, Homeland Security, Energy, Administration of Justice, Agriculture, Aeronautics and Space, Transportation, Treasury, Interior, Labor and other discretionary spending) accounting for $1.12 trillion. Additionally, net interest on debt is budgeted at $261 billion.

2. The projected revenues (individual income taxes, social security and payroll taxes, corporate income taxes, excise taxes, custom duties, estate and gift taxes, and other revenues) to support the 2008 budget are only $2.66 trillion.

3. Therefore, there will likely be a deficit of $240 billion (or more) which will be added to an already existing public debt of approximately $9 trillion.

4. In the past 10 years, the U.S. proposed budget has risen from $1.7 trillion to $2.9 trillion and the U.S. public debt has risen from $5.5 trillion to approximately $9.3 trillion.

5. The federal government has no alternative, in order to cover its ever-increasing budget and deficit spending, other than to increase its revenues. The federal government gets the largest portion of its revenues from individual income taxes; especially those individuals in upper brackets (the top half of individual taxpayers, in number, pay well over 95% of the total individual income taxes collected; while over 43 million individual taxpayers, out of approximately 135 million who file federal income tax returns, pay nothing at all).

6. The net result is that the federal government's budget, deficit spending, and monetary policies are putting an extraordinary "domino-effect" of financial pressure on state, local, and individual; the effects of which are compounded by a host of untimely foreign and domestic issues that also demand immediate attention (military conflicts, immigration, homeland security, healthcare, the housing market, social security, Katrina, energy shortages, global warming, and much more).

7. However, it is individual American consumers that bear the ultimate responsibility to pay for the fiscal management and monetary policy decisions of the federal government; since it is consumer spending and taxes that form the foundation of the American economy and American enterprise.

8. Accordingly, due to all of the facts and circumstances above, individual American taxpayers (especially upper-bracket tax filers) need a more direct voice in the U.S budget and tax process for which they are ultimately responsible to pay.

9. Time is of the essence to enact budget procedures and policies which make government spending reflect the will and priorities of the people and not the political agendas of current government administrations. Otherwise, Americans will lose their constitutional sovereignty.

10. In the interim, it is crucial that all Americans take the individual financial management steps that are necessary to preserve and protect their income, assets and property from the unreasonable demands and unnecessary loses that are resulting from the decades of failed financial management and self-serving monetary policies promoted by private and partisan interests and endorsed by the federal government.