Make nice and close the national debt divide
Mark Greathouse
(5/2023) $31,600,000,000,000! Dang, that’s a lot of zeroes. It’s our national debt. To get a visual handle on $31.6 trillion, imagine 62 football fields stacked six feet high with hundred-dollar bills. Still having trouble grasping the number? Thirty-one trillion years ago, our solar system didn’t exist.
Our national debt exceeds our gross domestic product (GDP) of $26.3 trillion. The debt-to-GDP ratio stands at 120 percent. Oh, and unfunded liabilities of $182.5 trillion exceed national assets of $180.5 trillion. Gag!
Federal annual tax revenue is about $4.6 trillion. Our government spends $6.2 trillion. Is there a problem here? Now, you just might think that politicians of both parties could put their heads together cooperatively and start reducing the Federal debt. LOL. They really need to venture beyond smoke and mirrors accounting. I’m a writer, but I don’t write fantasy.
To make matters potentially worse, rumors abound of shifting to a digital currency. It’s bad enough we use "Federal Reserve Notes" backed by the good faith of our government rather than hard assets like "Silver Certificates" or even – gasp! – gold. The Fed? Secretively created in 1913 from a meeting at Jekyll Island, GA (creepy feelings of Jekyll and Hyde?) by a bunch of bankers and politicians during Woodrow Wilson’s presidency, we can arguably blame it as blessing and curse for its sway on our nation’s fiscal policy. Doesn’t take a rocket scientist to figure the next step from currency backed by thin air is to go digital. I referred to the Hamilton Project in my op-ed last month. The Boston Federal Reserve engaged MIT on a 2-year pilot study of a fully digital currency (CBDC). While some major banks may yet flirt with it, the Fed has nixed it for now. They reckoned that fears of lack of privacy, loss of the freedom associated with cash,
lack of fungibility, and possible government intrusion into transactions would generate major pushback. Even the People’s Bank of China has found that usage of the digital yuan has bordered on the totally inactive. If a communist dictatorship can’t force feed digital currency, it’s highly unlikely to take hold in a democratic republic. Even the venerable Bank of England is nearly ready to give up on its experiment with digital currency.
So, how bad can government-by-deficit get? Texas in 1836 had just gained independence from Mexico and taken on a massive debt of $1.25 million ($4.8 billion today) under the assurance by President Andrew Jackson that the Republic of Texas would quickly join the United States. By 1850, that debt had grown to $12.4 million despite statehood in 1845. The Texas government couldn’t rub two nickels together. Texans suffered terribly. It took a dang-blasted U.S. war with Mexico (settled in 1848 with the Treaty of Guadalupe Hidalgo) and a bunch of financial wrangling of loans, bonds, treasury notes, land deals (Compromise of 1850), and more to pretty much hornswoggle and finagle Texas into a semblance of solvency. And then Texas was set back economically for another dozen years by the War Between the States and the rigors of reconstruction. It took hard choices to turn it into today’s economic juggernaut of agriculture, oil and gas, and tech
industry. My point? Short of the printing press, we have no big government to bailout the United States today. WWIII hardly seems an option, though WWII helped lift us from economic depression at a cost of many lives.
Can we expect a legislator gaggle comprised mostly of lawyers to fully grasp the potential disaster of continued deficit spending? How do we get them to overlook their partisan bickering and tackle perhaps the most important issue facing our nation today. You see, while money isn’t inherently evil, the worship of it is. Most politicians of both political parties do worship at the altar of money. Solutions? First, elected officials must accept blame.
A quick look at the history of our spiraling debt is eye-opening. Back in 1982, our national debt stood at a mere $1.1 trillion with a debt-to-GDP ratio of 34 percent. It quadrupled by 1992 while the ratio nearly doubled to 61 percent. This was getting ever uglier, as well-intended social program spending was on a budgetary rocket. By 2012, our national debt had reached $16.1 trillion with a debt-to-GDP ratio of 99 percent! Today, it’s 123 percent! Bailouts? Inflation? Recession? We seem to be trying to mimic the economic disasters of Lebanon, Venezuela, Mynmar, and the like
Whom does our government owe? Our biggest creditors (37.8 percent) are U.S. individuals and institutions holding U.S. bonds and notes. Social Security holds 13 percent, while the Federal Reserve holds another 12 percent of our debt. Communist China holds 5.7 percent, Japan 5.4 percent, and Belgium, Ireland, and Luxembourg hold 3.2 percent. Oh, and there’s the printing press spewing inflationary currency.
The issue isn’t about raising the debt ceiling! It’s about America getting back to it’s roots as an exceptional nation of freedom and the opportunity for virtually anyone to succeed. We don’t need a bunch of elected-for-life legislators and unelected bureaucrats playing games with our tax dollars while conjuring up wasteful adjuncts to programs of debatable value to the long-term welfare of our nation. Food stamps and welfare payments have ballooned way out of control, millions of COVID dollars are increasingly found to have been fraudulently applied, our underfunded military struggles to make force goals and maintain a strong defense posture, most of our education dollars line administration and union pockets rather than teachers on the front line, and government healthcare programs are a travesty of expensive influence peddling.
The solution isn’t to raise taxes. We’re already victims of the hidden tax called inflation. One answer to our nation’s financial woes is trimming feel-good programs while offering tax incentives for business growth and curtailing agenda-driven regulations with little cost-benefit. Our Federal government has metastisized from 1.9 million employees in 1964 to 4.0 million today across fifteen agencies.
What can you do? Call, write, or email your legislators to demand reduced spending toward cutting our national indebtedness. It’s a given that we dare not give Congress an effective blank check by raising the debt ceiling. It will only worsen our already critical fiscal situation. Torniquet, surgery, sutures, and healing are in order. We must close the national debt divide. It’s time for legislators of both parties – sanctimonious Republicans and Democrats – to start replacing well-intended but ill-conceived political zealotry with the common sense to significantly trim our annual spending. It will not be easy, as our nation must overcome a gaping divide between reason and emotion. We had best heed Abraham Lincoln’s words in 1862, "We shall nobly save or meanly lose the last best hope of earth." What political leaders will emerge who are capable of accomplishing such a prodigious task? Red pill or blue pill? Hope they wake up and take the
red one. Just sayin’.
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