There is an old admonition, courtesy of Justice Oliver Wendell Holmes, that no one has the right to falsely shout “fire” in a crowded theater and cause a panic. The abused part of that line is obvious. The neglected part is just as important: When the danger is real, responsible people do not stay silent. They sound the alarm before the smoke fills the room and the flames become impossible to ignore.
That is where the United States is today.
The fire may not yet be visible to everyone, but it is already burning. Recognizing it is the first step. Acting on it is the next.
Our nation’s fiscal condition poses a real and growing threat, and pretending otherwise will only make the consequences more severe.
And I am shouting fire.
Washington’s overspending has produced a federal debt that is plainly unsustainable. Interest-bearing debt alone now exceeds $39 trillion and climbs higher each year by trillions of dollars. Add unfunded commitments for Social Security and Medicare, and the total burden rises to more than $136 trillion, a number so large that it barely registers. Spread across the population, the liability amounts to hundreds of thousands of dollars for every American.
According to projections from the Congressional Budget Office, the debt will exceed $63 trillion within 10 years. In less than a decade, the trust funds supporting major entitlement programs are expected to be depleted, requiring by law major cuts in benefits. The federal government can continue on this path only by borrowing more, which compounds the problem, or by printing money, which courts hyperinflation. That cycle cannot continue indefinitely.
The government itself acknowledges this reality in plain language. Its own financial reports describe the current fiscal path as “unsustainable.” That word means the system, as currently constructed, will not endure. At some point, the burden becomes too great and the consequences grow severe. It will make the Great Depression seem mild. That is the future awaiting a nation that continues to spend far beyond its means.
This situation did not arise overnight, nor can it be blamed on one party or one generation. It is the product of years of decisions in which immediate political gain took precedence over long-term stability.
Voters were promised benefits, often framed as cost-free, while the real price was pushed into the future. Little by little, we have been mortgaging tomorrow until soon there may be nothing left to mortgage.
The good news is that the method of putting out this fire is no mystery. The principles required to restore stability are well understood and have repeatedly proven themselves in practice. Limited government, restrained spending, and less federal intrusion into our lives remain the foundation of long-term prosperity.
RELATED: Jerome Powell is out — for good reason. Here are 4 of his top blunders.
Reform must begin with the biggest drivers of future debt. Entitlement programs must be strengthened for the long term, not ignored for short-term political convenience. That does not require cutting benefits for current recipients, but it does require thoughtful reforms to keep those programs viable for future generations.
At the same time, the scope of the federal government should be reconsidered with renewed respect for constitutional limits.
America’s founders envisioned a system of limited federal powers and reinforced that design in the 10th Amendment, which reserves powers not specifically granted to the national government to the states or the people. A more disciplined understanding of federal responsibility would not only reduce costs, but also strengthen accountability and preserve liberty.
Examples around the world show that nations can confront fiscal crisis and begin to recover through disciplined economic policy. Each country’s circumstances differ, but the lesson is consistent: When governments commit to sound principles and follow through, better outcomes follow.
The United States still possesses enormous strengths, including a dynamic economy, innovative capacity, and a resilient people. Those advantages give us a window to address this problem before it reaches the breaking point. But that window will not remain open forever.
Ultimately, the responsibility does not rest only with elected officials. It rests with the public that sends them to Washington. An informed electorate that understands the stakes and demands accountability can still change the country’s course. The challenge is serious, but it is not beyond our ability to meet.
The fire may not yet be visible to everyone, but it is already burning. Recognizing it is the first step. Acting on it is the next. The future will be shaped by whether we confront this danger now or keep looking away until the consequences can no longer be avoided.
New York Gov. Kathy Hochul (D) is going all in on taxing the rich.
The governor recently proposed a new pied-à-terre tax as a matter of “fairness.” The tax, which would affect nonresident owners of high-end New York City properties, is a surprising reversal in support of a tax proposal by New York City Mayor Zohran Mamdani (D). Hochul had previously rejected the proposal.
While the rhetoric around this tax may resonate politically, the policy itself is a textbook case of how populist tax schemes can undermine investment, distort housing markets, and ultimately leave the city worse off.
Albany’s ingenuity in thinking up new modes of taxation is unparalleled.
"Those who benefit from the city without living in a full-time capacity should contribute to the costs that it takes to run the city: public safety, world-class parks, amenities, the roads, the subway system,” Hochul says in the video.
She continues, "I believe it will protect working New Yorkers and ensure that everyone who has an address in New York City is investing in its continued success."
Hochul may be well attuned to the clamor of politics, but she is tone-deaf to sound economics.
Nonresident owners of New York City real estate already pay taxes — roughly $45,000 to $65,000 on a pied-à-terre with a market value of $5 million — while hardly benefiting from the public services their tax dollars fund. They also pay consumption-based taxes and fees when in New York City.
Nonresidents who own a business in the city also contribute revenue to the city budget.
The pied-à-terre tax has obvious defects in that it is arbitrary, distortionary, and status-dependent. It will likely lead to valuation challenges and maneuvers to keep properties below the $5 million threshold.
Applied only to nonresidents, it would create strong incentives to avoid the tax by altering residency status or otherwise manipulating the property title to obscure de facto property ownership.
For the most expensive real estate, the tax will lower property values — and thus property-tax liability — even though, certainly, “that effect gets distorted when the future tax burden on the property depends on the identity of the purchaser,” notes City Journal.
Taxing these nonresidents into calling New York City home is a poor welcome from the governor. Nevertheless, it suggests that her zeal to tax “New Yorkers,” unlike Mamdani’s, has subsided.
RELATED: Mamdani is moving from one failed promise to another
New York State already has the least competitive tax structure in the nation and the nation’s highest state and local tax collections per capita. From its “tax benefit recapture” provision to taxing many remote nonresidents under its “convenience of the employer” rule, Albany’s ingenuity in thinking up new modes of taxation is unparalleled.
The latest data shows that New York lost $9.9 billion in adjusted gross income (AGI) between 2022 and 2023 — a net loss of taxable income not readily evident from migration trends. Specifically, Manhattan, while gaining tax filers on net, lost $922 million in AGI.
In 2023, the top 1% (about 93,000 people) contributed roughly one-third of state tax revenue, supporting 20 million residents, according to Empire Center. With the nation’s third most progressive state tax system, New York has paved its own road to insolvency by chasing out high-net-worth taxpayers.
Sobered by plain budget facts, Hochul has begun pleading with wealthy New Yorkers to “go down to Palm Beach and see who you can bring back home.” She has opposed Mamdani’s “tax the rich” surtaxes on high-earning city residents and corporations, but not the city’s fiscal indulgence.
New York City spending has grown by more than 50% over the past decade — roughly 12% to 14% after inflation — even as the city’s population has declined slightly. This year, New York City’s spending is about $10 billion higher than that of the entire state of Florida.
Gov. Hochul misunderstands the core problem underlying the city’s fiscal plight. Rhetoric alone will not convince current and former wealthy New Yorkers that the state’s political leadership recognizes they have paid their fair share after all.
Katie Wilson, the 43-year-old leftist blogger elected mayor of Seattle last year, apparently finds it amusing that deep-pocketed residents and businesses are fleeing her crime-ridden city.
During a recent event at Seattle University, lecturer Joni Balter raised the matter of downtown Seattle's apparent inability to "grow job these days," noting that "the city has lost 25,000 jobs over four years, and the thinking is — the data folks say — that if you extend that out five years, it could be as high as 37,000 jobs."
'We still have the very regressive tax system.'
According to a recent report from the the Downtown Seattle Association, the Emerald City's downtown has seen a 14% decrease in brick-and-mortar retail jobs since 2010 and lost an estimated 13,000 jobs just last year, amounting to the biggest decrease in jobs since the pandemic.
The report noted further that Seattle's downtown office vacancy remained at a post-pandemic high of 25%; the central business district experienced an office vacancy rate of 32% last year, nearly double the previous high point during the Great Recession in 2009; and the combined taxable value of the 20 highest-valued properties in Seattle's downtown has declined from over $10 billion in 2021 to roughly $5.1 billion this year.
When asked about her plan to "turn that around," Wilson — who appeared on stage alongside fellow radical Girmay Zahilay, the newly elected King County executive — attributed Seattle's exodus of jobs and businesses to a number of factors including potential workers' apparent inability to afford living in or near the downtown; homelessness and public safety issues; and the "tax environment."
While apparently interested in tackling the affordability, homelessness, and public safety issues, Wilson signaled that her city's crushing taxes won't soon be changed.
RELATED: Mamdani finally admits what people knew about his candidacy from the start
Wilson, who co-founded the Transit Riders Union in 2011 and endeavored in years past to "Trump-proof Seattle," was later asked about the "taxing climate" and whether progressive taxes were an "easy and promising solution."
After noting that she found it "very exciting" that state Democrats passed a 9.9% tax on annual taxable income exceeding $1 million for individuals or households and recalling her efforts to push similar taxes in Seattle, Wilson said that claims that wealthy residents will flee the state are "super overblown."
But to those beleaguered residents who have chosen to leave or might do so in the near future, the mayor waved, said, "Bye," and laughed in concert with fellow travelers in the sparsely populated audience.
"In general, we still have the very regressive tax system, and my office is doing a lot of work to look at what our options are in terms of progressive taxation," continued Wilson. "We do have more flexibility at the city than the county, in terms of our taxing authority."
Despite Wilson's casual dismissal, high taxes in Seattle appear to be chasing jobs to cities like Bellevue.
Jon Scholes, president of the Downtown Seattle Association, suggested that Amazon's decision to relocate thousands of employees from Seattle to other King County locations was the direct result of Seattle's overwhelming tax burden, reported the Center Square. Starbucks, which is headquartered in Seattle, also appears to be angling for greener pastures.
Among the taxes the city has implemented is the Social Housing Tax, a 5% levy on employee compensation exceeding $1 million, and the JumpStart Payroll Expense Tax, which the city slapped on companies with employees making more than $150,000 annually.
"What we need is more businesses in Seattle paying taxes," said Scholes. "That's how we strengthen the tax base."
Like Blaze News? Bypass the censors, sign up for our newsletters, and get stories like this direct to your inbox. Sign up here!
The IRS notice in my mail represents another piece of evidence suggesting the Trump administration is taking the fight against fraud seriously.
If abortion mill defunding is not included in a new reconciliation package, Americans will once again be forced to fund abortion, inflicting a moral wound on our national conscience.
Rather than confront the real problems plaguing their country, Germans are exhausting their goodwill on a sick whale.
www.theblaze.com
www.theblaze.com
thefederalist.com
thefederalist.com
www.theblaze.com
FACT CHECK: Did Dan Goldman Call for Trump’s ‘Elimination’ After a 2024 Assassination Attempt?