By Ron Espinola Posted March 2, 2011
“I need a credit card that’s got no limit and a big black jet with a bedroom in it.” ~”Rockstar” by Nickelback
The lyrics from this Nickelback song seem to represent the sentiment of many Americans today and of their elected officials.
The national debt is not a new issue, but it is one that has come to the forefront of the news cycle due to the astronomical deficits of recent years ($1.4 trillion-2009; $1.3 trillion-2010; $1.5 trillion-2011 and a projected $1 Trillion-2012). When you add all of the deficits together over time, you get the enormous amount of our national debt mentioned in the headline…one that grows faster than you can count (visit http://www.usdebtclock.org).
President Obama’s proposed 2012 budget would reportedly save $1.1 trillion over 10 years. This is a start, but cutting annual deficits by only 10% on average still leaves the US in an enormous and unsustainable hole. With the release of the budget also came the forecast of continued deficits until 2021..the same 10 years during which we “save” $1.1 trillion.
Can we increase revenue in the form of higher income tax, payroll tax, social security, corporate tax, and user fees…of course we can. The proposed budget does some of these things. But who wants to entrust the government with more of our money to waste?
What happens when the Patient Protection and Affordable Care Act (health care reform) takes full effect in 2014? It has been promised that implementation will be deficit-neutral with the cost being offset with tax increases on the wealthy and savings in other areas. However, the government is not a for-profit business and when it promises one thing and does not deliver, nothing happens. In the 1960s, Americans were promised Medicare costs would be $9 billion in 1990 and were actually $67 billion. Boston’s “Big Dig” ballooned by $12 billion and seven years (www.cato.org). Even the Post Office is not immune to the government’s habit of losing billions. In a study it released in March, the USPS will lose $238 billion over the next 10 years. It is not hard to imagine the PPACA will be more expensive than we’ve been promised.
More importantly, can we trim government budgets and operate more efficiently and hold our officials accountable? I think the answer is no. Much like a parent who finds it difficult to say no to a child, it is much easier to say yes to the screaming child in the check-out line just to avoid the headache and embarrassment. But the senators and representatives simply do not have the ability to say no to voters and special interests. But should we expect them to? Saying no is simply not in their best interest. The politician who has the courage to stand up to their constituents will soon be out of office.
Of course, nothing is this simple. But if all you see is increased spending with nobody showing interest in applying the breaks, what can the future hold?
In all likelihood something similar to what has happened in Ireland and Greece. In 2009, Ireland and Greece had debts that were 126.8% and 57.7% of their respective Gross Domestic Products. The US percentage was 52.9 in 2009. Both countries have enacted drastic cuts while receiving enormous bailouts.
In the US the average consumer debt (mortgages, credit cards, car loans, etc) is $52,496 (www.creditsesame.com). The national debt per person amounts to $45,552. That’s all citizens, not just adults or taxpayers. Therefore, to pay off all of our debt would cost almost $100,000 per person.
Smaller countries with big problems like Greece and Ireland can be bailed out. Can the global economy do the same with a country the size of the US? Can you come up with your share of $45,552? Since the answer is probably no, maybe we should expect and require more from our elected officials, or take away their credit card.
They have the credit card, but we need to take away the big black jet.
