Debt and Deficit Gone "WILD"

Let's not be pessimistic about this - you know - is the glass half-empty or is it half-full. Let us be half full about all of this. It does no good to be half-empty because we are a lot worse off than half-empty. If we were only half-empty that would mean that we would still have something in our glass. At 14 Trillion dollars in debt we don't even have a glass anymore. But whatever - let's be positive.

Some politicians claim that the National Debt doesn't really matter because it is money that we owe to ourselves (Oh, I mean the taxpayers of America). So, even when the federal government just pays the interest on the National Debt it is infusing dollars into our economy - like giving a tax cut to the rich. But since Reagan, unfortunately, this is no longer true.

Before Reagan our governments borrowing was financed by Americans. After Reagan our National Debt became so enormous that Americans didn't have enough money to finance the Governments borrowing - so we borrowed from foreign countries. Or would it be more economic to say that we sold our debt to foreign countries. In other words, we sold the mortgage, or foreigners bought our mortgage. Now countries like Saudi Arabia, Japan, China, the U.K etc. own a good part of our mortgage. If in the last few decades, it has appeared to you that your government has been acting like a foreign country, this may be a part of the reason.

But certainly, one day, we will pay off this mortgage and the American people will once again own their country?

This does not even seem to be in the realm of possibility. Politicians talk of balancing the budget as they did in the year 1999 for the first time in many decades. By the way, this supposed surplus that we had, momentarily, was only accomplished by pilfering money from the Social Security Trust Fund. Excess monies had been accumulated in the Social Security Trust Fund because of an increase in the Social Security tax in 1983. An increase was mandated to compensate for the baby boomers. From that year on, the Social Security had a surplus but everybody from Reagan to Clinton used the Social Security surpluses for other general fund spending purposes.

Balancing the budget - or having a year in which the government does not produce a deficit by spending more money than it receives - only manages to pay the interest on the National Debt. A balanced budget pays nothing on the principal or the debt itself. In order to pay down the debt itself, the government must create a surplus - spend less money than what it takes in every year. And then use those surplus monies to buy back Debt (treasury bonds).

Is this a possibility? Seems not. I have never heard a politician in my lifetime talk of paying down the principal on the National Debt. The political answer to the National Debt seems to be like our policy towards gays in the military - don't ask; don't tell.  Or should I say what use to be our policy towards gays in the military?

According to the U. S. Constitution, government exists for just two purposes: (1) to provide its citizens with the freedom to live their lives as they so choose, and (2) to protect us from those, both foreign and domestic, who would try to take away that freedom. Once government steps outside of those two purposes, it is itself taking away that freedom. The definition of freedom is the absence of coercion or constraint in choice or action.

The Federal Government doesn't do anything well. It's inefficient, wastefull, slow, prone to fraud, and ineffective.  How well did the Securities and Exchange Commission monitor the Madoff situation; how well did FEMA handle Katrina; how well does the INS handle the immigration problem; how well the FDA inspects the food industry, the bailout fiasco.... Government cannot provide a service better than you can arrange it for yourself. Why would you trust the Federal Government to take care of your health or retirement?

Your money is spent through Appropriations Bills passed by The U. S. Senate and signed by the President. The Government does not have any money, it takes your money from you and, and borrows more, then spends that! The bailouts of 2008 and 2009 are purely deficit spending. Expect to see enormous deficits in the foreseeable future, leading to much more debt; and interest payments on that debt will become the largest item in the federal budget. On C-SPAN, President Obama boldly told Americans: "We are out of money."  No shit "O" Anointed ONE!

Finally, the dollar, today, is almost worthless.  In 1913, when the Federal Reserve was created with the duty of preserving the dollar, one 20-dollar bill could buy one 20-dollar gold piece. Today, fifty 20-dollar bills are needed to buy one 20-dollar gold piece. Under the Fed's custody, the U.S. dollar has lost 98 percent of its value. The dollar is the storehouse of our wealth. Has the Fed faithfully safeguarded that storehouse?

Thomas Jefferson said, "In questions of power let us hear no more of trust in men, but bind them down from mischief with the chains of the Constitution." Where has all that wisdom our founders provided for us to follow, GONE?

Posted via email from Global Politics