The national debt is easy to understand since almost all of us are in debt to some degree. However,
few of us calculate the percentage of the national debt owed by each taxpayer. As of today, each
U.S. taxpayer, excluding non-citizens is approximately $65,000 but this is not realistic as half
our citizens are too poor or are on Social Security and do not pay much or any taxes.

Unlike our federal government all state governments except Vermont must balance their budgets.
States do this by decreasing spending or increase revenues.

The two largest spending agencies are Health and Human Services and the Department of Defense,
which for the last few years have been sequestered, yet our national debt continued to rise. Why?

The national budgeting process does not allow unspent funds to be retained. Additionally, there are
no “rewards” for any agency or office to be under budget. Therefore, as anyone who’s ever worked in
government knows, all government office under budget goes on a spending spree to spend all the
money not spent, before the end of the fiscal year. What happens to all the equipment and supplies
that are replaced? Who knows or cares? After all it’s taxpayer’s money, not theirs!

One way to reduce our national debt is the almost half $1 billion interest due and paid each year.
Since Medicaid is a major driver of our national debt, transferring it to states who must balance
their budget every year will bring a large portion of the national debt front and center to those
who eventually must pay for it.

Unlike Medicaid, Medicare is sequestered. The past few years, Medicaid spent all the money it
wants. The original Medicaid started as a 50-50 jointly funded program but over the years has
become more like 47% state and 53% federal funding. Medicare has huge problems mainly because life
expectancy of seniors is growing as is the cost of maintaining their health. New Medicare
recipients at 65 years of age have a life expectancy of 90 years which is increasing.

States usually spend 25% of their budgets on education. 50% of the average state budget today
consists of those two programs. The other 50% of the state budgets are for the other departments in
state government (i.e. transportation, police, parks recreation, etc.)

When the government block grants federal funds to the states, the percentage of money spent on
Medicaid and education will increase to 66% of the budget and would include 100% of the costs of
waste fraud and abuse. These problems exist mainly in entitlement programs, how will tiny,
unsophisticated and incapable Medicaid Fraud Control Units increase the recoveries?

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