Yesterday President Obama said a government shutdown “would throw a wrench into the gears of our economy.” Here at the Economic Prism we say, “Bring it on.” For a wrench caught in the gears is just what’s needed…especially if the wrench can then be used to bolt down the top hatch on the national debt.
You see, Congress has raised the debt ceiling 79 times since 1940. That’s more than once per year. Obviously, the debt ceiling hasn’t done much to control spending. Rather, the debt keeps growing like a metastasized cancer…with a doubling time of about 7 years.
Currently, the debt ceiling’s set at $16.699 trillion. Even so, it was shattered months ago. The Treasury just hasn’t owned up to it yet.
In fact, the US Debt Clock shows the debt at $16.9 trillion…well over the legal limit. But regardless of your opinion of the current debt ceiling battle between the House and President Obama, one thing everyone can agree on is that government deficits, and the massive accumulation of federal debt, will drag the prosperity of future generations down like a ball and chain attached to a prisoner’s ankle.
Right now, each citizen’s share of the national debt is $53,528. Plus, if you tack on household, business, state and local governments, and financial institutions, the total debt per citizen jumps to $188,853. But that’s nothing…
Social Security and Medicare currently pay out more than they take in. The difference is made up with debt. In other words, money is borrowed from the future to make good on promises made yesterday. The combined unfunded liabilities of Social Security, prescription drugs (Medicare Part D), and Medicare have eclipsed $125 trillion. That amounts to $1.1 million per taxpayer. Without a doubt, that’s an unethical and intolerable burden for young adults just entering the workforce to pay off.
If you’ve ever wondered how we ended up here as a country, what follows is a brief explanation…
The Experience of the Last 100 Years
“The principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale,” wrote Thomas Jefferson to John Taylor in 1816. Unfortunately, no one’s had much respect for Jefferson’s insight. Politicians know that promising handouts is what gets them elected and keeps them in office.
Voters don’t want to hear about belt tightening, budget cuts, or prudent spending. Politicians that base their campaign stump on these sorts of things always lose. They are considered cranks and curmudgeons.
Ideas of independence, liberty, and freedom presently exist as mere platitudes. People like to pretend they still believe in them…but they really don’t. When it comes down to it, they want bailouts, safety nets, and free drugs from the government.
The experience of the last 100 years of elections is that people always vote themselves largess out of the public treasury. The majority of voters look around and see economic and social problems dogging them…and they want the government to spend money to fix them. On top of that they want a free lunch.
The convictions of the people do not want government to preserve and foster a free society. They want the government to promise fantasies and deliver miracles. Voters want reduced taxation and increased public spending. They want promises of greater prosperity and entitlements for a cushy retirement. They want to have their cake and they want to eat it too.
Committed to Mass Public Spending
Naturally, a requisite and deliberate national policy of government deficits has been adopted to temporarily deliver the better life the convictions of the people demand. Remember, this is what the will of the people want – it’s what they always vote for. The evidence is everywhere…
The collective will wants money grants for schools, museums, and nature centers. They want farm aid and railroad subsidies. They want green energy…and they want everyone else to drive battery powered cars.
They want free food and disability checks forever. They want money for robotic squirrels, Moroccan pottery classes, caviar consumption, Martian food tasting, and much, much more. Most of all, they want all these things and they don’t want to pay for them…they want someone else – that’s you – to fund it all.
Quite frankly, the government committed itself long ago to a system of mass public spending; there’s no turning back now. Thus, while individuals are generally appalled by the nation’s staggering debt levels the collective voter continues to demand their share of government pork. Collectively, everyone wants something for nothing. Collectively, everyone wants to live at the expense of everyone else. Politicians are eager to promise the more abundant life if that’s what it takes to get elected.
You know the consequences. Tax revenue falls short. Deficits grow. Debts pile up to the moon. The Federal Reserve stretches out the farce by stretching out the dollar. Individual liberties are traded in for federal safety nets that are now fraying at the edges.
Don’t expect anything responsible – like a balanced budget – to come out of Washington anytime soon. They’ll play their part to keep the charade alive and leave the putrid mess for someone else to cleanup. Their reelection campaign depends on it.
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