The Problem of Debt

userpic=moneyThe other day, I was reading an article on the agreement on the debt ceiling when something caught my eye:

 The new proposal to balance the budget in a decade would zero out the federal deficit almost twice as fast as previous Republican efforts.

“It’s time for us to get serious about how over the next 10 years we balance this budget and put America on a sustainable fiscal path,” the speaker said after the debt ceiling measure passed the House, 285 to 144.

Think about what that says. We had a balanced budget under Bill Clinton.That meant that we were not increasing the Federal debt. After 8 years of a Republican administration and 4 years of a Democratic administration (here’s another analysis), we are now at the point where it will take at least 10 years to bring the budget back into balance, let alone pay down the debt to a reasonable level.

How do the Republican’s propose to achieve their goal? Not through new taxes. Not through cuts to the Defense budget. According to the article, “their approach would require steep reductions in domestic programs — particularly education, infrastructure investment and the safety net for low- and moderate-income Americans.”

Now, I’m all for working our way back to a balanced budget, and to bring the debt down to a reasonable level (but not wiping it out–there are many reasons not to do that). But if we are going to do it — and if it is a National priority — it has to be shared sacrifice. It can’t just be in domestic programs. There needs to be significant increased income and significant cuts across the board. If there is going to be pain — and there will be — it must be shared.

If our leaders do not feel this is a program worthy of shared sacrifice… if our leaders feel do not feel this is important enough for everyone to give a little… then we may just as well live with the debt we have. After all, other countries are perfectly happy having us pay interest to them, reliably. They show no great desire to be paid back; they are not increasing the interest rates they charge us because they do not believe America will pay its bills. (As an aside, that was the problem with Spain and Greece: other countries believed there was a risk they wouldn’t get their interest payments, and thus kept raising the rates to account for that risk — this is something that hasn’t happened with US debt). I certainly feel that most people don’t understand the National debt, nor realize that households are different than nations, and there is no agreement on what is too much debt.

Personally, I do not believe our leaders feel the debt and deficit is a real issue that requires shared sacrifice and pain from everyone. They are willing to use it as a campaign issue to goad the other side, but want to protect their sacred assets while letting others pay. This is being done by both side. That’s not fair.



2 Replies to “The Problem of Debt”

  1. I would like to roll everything back to 1999, size of the government, and the tax code.

    I know is simple and naive, but I think it could work, obviously some changes would have to happen to accommodate medicare part D and Obamacare, but I think it would be a good start.

  2. The Republicans claim they’re trying to prevent us from becoming another Spain or Greece. But what I’ve always found ironic is that one good way to sow some doubts about whether we’ll be able to pay our bills is making a big fuss about the debt ceiling every time it comes up. So essentially, Republicans are creating the problem they claim to be solving.

    The Republicans have become the proverbial man who’s holding a second man down on the ground with a boot pressed to his neck. The first man is willing to do whatever it takes to help the second man out of his plight — except removing his boot from the second man’s neck.

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