- Last Updated on Tuesday, 27 March 2012 20:54
- Published on Tuesday, 27 March 2012 20:54
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Just last year, the entire Federal Government was on the edge of a shutdown because legislators were deadlocked over a way to bring down the debt. Or, more accurately, find ways to reduce the rate at which the debt is increasing. The debt was at the center of a major national debate, on spending, the deficit, and what it would take to bring the budget back into line. It was a debate that many were longing to have. And at times, when this plan, or that, was hatched, there seemed like there might be a glimmer of hope that the two deadlocked sides of the Congress, and the President, might be nearing an agreement. It seemed
possible, but each time, there was a breakdown, and a change of course, and the debate had to start all over again.
The last inkling of at least some agreement was the Budget Control Act of 2011. It wasn’t much of a bill, but facing a vote on increasing the debt limit, it was the closest the two sides, and the two houses were going to come to an agreement. It established a series of discretionary spending caps. This is a loose definition at best. Also, it exempted the DOD and most of the entitlement programs. At the same time, it set up a super committee that was to come up with $1.5 Trillion in savings. Unfortunately, the super committee was under the control of the same hyper partisans that run Congress, and quietly, the super committee announced that they couldn’t come to an agreement on a plan to send to Congress. It was a sad performance.
Now, many months later, the election year is shaping up, and if you listen to the rhetoric, there is one word, from both sides, you never hear, and that’s “deficit.” It is as if this terrible hemorrhaging in our national accounts has just gone away. Mitt Romney almost never mentions it, and the President, if he does refer to it at all, does so only in passing. As for the Congress, with the exception of a few members who yes, apparently did stay awake during their economics classes, it’s an issue they’d rather not talk about. Even the Tea Party, now seemingly more focused on the partisan fight this fall, doesn’t talk about the debt all that much.
However, it won’t be long, certainly with the arrival of the first vote to increase the deficit ceiling, that the issue will be back in the news. However, for this election, it seems like a forbidden topic. But, that shouldn’t be the case. Now is when we need to be having this discussion, and now, in the middle of a national election, is the time for both parties to actually lead, and begin forging a national debate, that could, perhaps lead to a national consensus.
Just consider how bad the situation is right now. As of last week, the overall outstanding debt owed by the United States, reach $15.574 Trillion. I know, after a while billions and trillions just start to numb the voters’ ears. But think of it this way. That number represents 115% of the Gross Domestic Product. That is the largest percentage, when compared to the GDP, ever. We didn’t even exceed 100% during World War II.
Of course, most people can’t feel, or see the national debt. It’s an amorphous thing. But, it’s not quite as remote as you might think. Just consider that $390 billion of your tax money and debt which your tax money helps fund, goes to pay the interest on the debt. That’s the equivalent of what we spend on the Army and the Marines combined. Also, consider who we owe money to. Out of that massive debt total, almost half of what is available to the public, is owned by foreign investors.
This problem took years to create, and will take years to fix. But unless we agree that there is a problem and that it needs fixing, then we’re going to see the situation get worse. Sadly, too much debt has the potential to retard growth. Arguably that’s already happened. Additionally, it creates a problem for our national stability and security. The more debt we have, the harder it will be, in the event of a national crisis, to find the resources we need to deal with a major problem. And finally, there is the sad fact that because of our inability to figure a way out of this problem we watched a major bond rating organization reduce our bond rating. The idea that this could happen to the United States seems incredible. But political Washington managed to absorb the news, and keep on going, as if nothing happened. Hopefully, this fall, if enough Americans of all political persuasions raise the issue, then maybe, the two parties will have no choice but to start talking again.