On Braving Our National Debt
Imagine a world without slavery. Where people are able to live and move about as free men and women. I say imagine, because slavery and bondage is happening here in America right now. It is all around us and is growing so strong that I sometimes wonder if we will ever live in a country where that slavery is eradicated. People who know me may be thinking that I am about to share my thoughts on human trafficking. But what I am talking about is a slavery that may be harder to fix because instead of us being the abolitionists, we are the ones in shackles - enslaved to our national debt.
America is 15 trillion dollars in debt. That’s a million millions, or a thousand billions. It’s a lot of money, and split between us all, (310 million) that’s $50,817 per citizen. That’s a lot. That’s you. And that’s me.
So like all slaves in all eras, we want to be free. We have to be free. But, how?
Let’s look at just a few of the chains that are getting tighter and heavier on us:
Social Security: guarantees citizens 65+ a living wage to ensure they don’t fall below the poverty line. The way they receive this wage is through taxing everybody with jobs that are below age 65. So as you pay taxes now, you expect a return once you hit age 65. The problem is, right now we have about 45 million Americans who receive Social Security – and in the next 20 years – there will be over 70 million. What this means is that as you give over 12% of what you make to this initiative, you’re not guaranteed to receive its proclaimed future benefits.
In the next 25 years, Social Security is expected to be capable of paying just 77% of its promised benefits. However, out of all our entitlement benefits this is the most “under control.”
Medicare: guarantees social insurance to citizens 65+ (and a small percentage goes to younger ones). It covers half the cost of medical bills – regardless of income or medical history. The same problem arises with the projected number of 65+ citizens rising in the next 20 years. This is the one that is spiraling out of control. When we loom at the numbers it is hard to fully fathom. Pretty soon the interest alone on these payments will outweigh our entire annual budget.
Medicaid: provides insurance coverage for families with low incomes (not the only eligibility factor – but the primary one). So as people don’t make enough money to purchase insurance themselves, they’re covered by this program, which is funded by everyone’s tax dollars supporting it.
Defense/War: we definitely need a defense budget. However, in a decade driven by fear and excess we have allowed our Defense to spiral out of control. Here is how ours breaks down and compares to other countries:
Department of Defense, Veteran expenses, and Department of Homeland Security
Total budget: $929 billion
Next largest budget:
China $106 billion (so America is 6-7 times as big as this)
And America’s budget is more than the next 20 countries’ military budgets combined. How is this even possible?
Now there is a simple concept of having a higher income grants higher spending. So if someone who has the cash wants to go buy a Rolls Royce, than swell. But if I make $30,000 a year and decide to go buy a $250k car wouldn’t someone stop me? Better yet, who would sell one to me?
The last time our budget was balanced was in 2001. This is a crime. We need a balancing, and that’s why this upcoming election is extremely important. It’s important because how the next politicians view the debt we have, and how to handle the debt will decide the immediate future of our economy – but also the long-term effects that directly affect you – even if it doesn’t feel like it right now. Again that’s our debt and until we start seeing it that way we will never take it seriously enough to do whatever it takes to be free.
So there are two things that need to happen, which every individual and business must do when facing debt (somehow we don’t get this as political parties who decide to side on one strategy or another): make more money and cut expenses.
So let’s look at this “make more money” issue. there are the two sides of the spectrum:
1. Keynesian thinkers (as this side is called) are people that think the government should step in and manage wealth/how the economy progresses. This is done through taxing people with a lot of money more than they normally do to people with less. Simple logic, right? If you need $1,000 to live and only make $800 there is a simple solution: make more money. Generate more income. Raising taxes is essentially doing just that. It is forcing income into the government books.
2. The Supply Siders (as this side is called) believe that economic growth occurs when people with a lot of money can decide how to invest it themselves. This side believes that people with a lot of money will invest it in what will build them more money – which is traditionally thought to be businesses that provide jobs for people. Who benefits from this? Yes, the investors, but also people without jobs that need them - and then ultimately the government because as you raise income there is more tax revenue and also less entitlement benefits for the needy.
Then there’s cutting expenses. Where to begin? Where to cut? How about we do what no one wants to do and yet is the only thing that can be done? Cut down on the three entitlement programs and Defense. And now no one is happy.
I look at all of this and think of Dave Ramsey’s radical way in dealing with debt. He is an amazing financial guru and has helped hundreds of thousands of people get out of personal debt. Why aren’t we – as a national family – taking our debt as seriously as we take our own? Our answer can’t be that it doesn’t personally affect us – because it does, some people are just feeling it at different times and in different ways than others. What is Ramsey’s strategy? Getting serious. And serious hurts and getting serious sucks.
If you’re in debt you suck it up until you’re out of it. Cut costs, get uncomfortable, look a little “off” to people that don’t understand, and so on. Republicans chant don’t cut taxes, don’t cut Defense! Democrats say don’t cut programs, raise taxes on the rich! All say don’t touch our Medicare and Social Security! Don’t touch it…until there is nothing left. I’d say the real answer is do all of the above.
Imagine if we joined hands as a nation and said whatever it takes for us to be free - let’s do it. What if we as a nation voted on taking on a higher tax that specifically gets rid of the debt for a specific amount of time? What if we as a nation voted to cut back on these entitlements so that we say with one voice I will take less now so my children can have a financial future later. What if we as a nation said, whatever politician does not vote for a budget with no deficit won’t be reelected? Imagine the beautiful site that would be. And the most powerful example of a “we the people” nation perhaps in more than a century.
And if we as a nation say that no, this isn’t our fight…well, then we have no one to blame but ourselves. And then one day we will wake up like many a people of many a former great nation and wish we could have another chance.
Special thanks to David Perry in the making of this post.