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Debts and Deficits (Friday, July 29, 2011)

Well, everyone else is talking about it, so I guess I'll add my two cents... or fifty cents, now that I think about it.

According to the news, the national debt stands today at about $14.3 trillion dollars. That corresponds to nearly $47,000 of debt for every man, woman, and child in the United States. My nearly three month old nephew is already stuck with the bill for a new luxury car. And so are you, and so am I.

We all know Americans live beyond their means. It appears that the average adult in America carries about $4,000 worth of credit card debt. And most people seem to feel that this debt is largely insurmountable. Now realize that your country owes ten times that much, on your behalf! Even if the federal budget were balanced today, it would take many, many years to pay off the national debt — I'm guessing a hundred years, if we can manage not to be bankrupt before then!

Now don't get me wrong. Incurring debt is not a universally bad thing. If you want to buy a house, you take out a mortgage, and you pay it off over time. But during that time, you know that you need to keep to a budget so you can make those payments, and at the end of that time, you actually own a house. Obviously, you should not buy a house that is more than you can afford. You should not refinance the house over and over again, so that at the end of thirty years, you still owe the original cost of the house.

It's the same way for the federal government. It wouldn't make sense for them to bill everyone an extra $1,000 in a year, so that next year they can build new roads. Instead, the government issues bonds (which is one of the ways the government borrows money), uses the proceeds to build the roads, and then pays back the investors over time — so it only costs each person an extra $50 a year, over the next twenty years. And we expect that new road to last a lot longer than twenty years, and provide far more value over time.

The current problem comes by way of runaway spending, without any regard for raising revenue. I've read arguments that we are investing (borrowing) now in an attempt to spur a recovery from the recession, in the hopes that after the economy stabilizes, revenue will increase, and we'll be able to pay down that debt. And that's fine — you borrow some money to buy a used car now, so that you can get to some job, which you'll be able to use to pay it off. But more and more, it's not just a used car, but a new luxury car. And "eventually" is getting further and further away.

So to a point, I'm with the tea partiers who believe that we should not keep raising the debt ceiling indefinitely. It's going to take courage among our leadership to say enough is enough. I hate to think that our bills won't get paid, and I don't want the country to default — I understand the consequences of that. I do understand the need for deep cuts. I don't understand why conservatives want to cut useful social programs that take up just a tiny fraction of the federal budget, while leaving completely untouched, the waste in military spending.

According to the Washington Post in 2007, the wars were costing about $720 million a day. I've seen various estimates, but they are all running well in excess of $150 billion a year for the wars in the Middle East. That's three times what we spend on Social Security, and five times what we spend on Medicare. What's worse, is that most of the money we're spending in the Middle East is not to pay our troops, but instead, it's to pay for fuel that we've purchased from our enemies, that we burn, and it's gone forever; it's to pay for expensive hardware like missiles, that are used once, and gone forever. All of this money comes from tax payers, with the profits going to big defense, and no other benefit derived. We need to stop wasting money in the Middle East. Bring our troops home. You want to make the federal government smaller? Let's covert a large portion of our active military into National Guard, where at least they can help with disasters, relief efforts, and civil defense here at home, where we derive some value from the expense.

I also don't understand why conservatives are so opposed to increasing revenue. Our tax system is totally messed up. I have a fairly comfortable income, but I pay an amazingly low marginal tax rate. On the other hand, I know many people who can barely make ends meet, who are paying a significantly higher marginal tax rate. This indicates to me, that after years of lawmakers favoring the wealthy, we have a system that is both stifling to the average person, and not producing enough revenue to cover our expenses.

First and foremost, we need to stop subsidizing large profitable businesses with tax breaks: oil companies, coal companies, gas companies, telecommunications giants, big agriculture, auto manufacturers, and banks. We reward the companies that destroy our environment and our investments, and the people pay for it. The profits of these big companies go directly into investors pockets. That's great for me, but it is less than useless for the average American. You think an executive who makes an extra million is spending that in the local economy? He's not! He's pushing it right back into his investments. And when he does buy something, it's a jet, or a yacht. Sure, some of that money will eventually "trickle down" to the rest of society, but not nearly as much as if he were taxed fairly, and that excess money went straight back into the economy.

So yes, let's stop runaway borrowing. But let's also stop giving money away to the big businesses and the wealthiest Americans. Let's reduce our spending in the most obvious ways — not by cutting social programs, but by ending useless and unpopular wars. Of course, we should reform social programs where necessary, but let's get our priorities straight. What I can't figure it, is why with all the debate in congress, no one seems to be able to understand this!

—Brian (7/29/2011 10:40 AM)
(1 comments)

Comments

I hereby renounce all contemporary party affiliations. I now only support the Party for Progressive Wealth Accrual (PPWA). Our Platform:

1) More money for Ben
2) More time to spend said money for Ben
3) More stuff to use said time to spend said money for Ben
4) Even more money to buy said stuff to use said time to spend said money for Ben

Any questions?...oh, and to your last sentence - because most everyone in congress now are lunatics (on both sides).



-- Ben (9/8/2011 12:55 PM)

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