Yep! You read the title right. Our national debt is over 14.36 trillion dollars by the time you read this. Oh wait, make that 14.37, no that's 14.38..... It's ridiculous. Just guess a number. Or just check out www.usdebtclock.org and see for yourself.
You might be asking why is 14.3 trillion a special number to focus on. Well, that was our nation's debt ceiling anything after that is anybody's guess. The thing is that we have reached the debt ceiling before in 1985,1995, and 2002. So, while Timothy Geithner maybe scare mongering congress into raising the debt ceiling and Bohner falling for Geithner's tacktic, let's take a look at what history has to say.
Each time we reached the debt ceiling, payments to Social Security were still made on time, Medicare and Medicaid were still fully operational, no interest payments were missed and the economic Armageddon, Geithner claims would happen, never materialized. The world economy never tanked.
Now, I'm not saying those things couldn't happen. They could, but it would be up to Timothy Geithner if he allows them to happen. Geithner has tremendous discretion over how, when and which government bills get paid because after all he is the Secretary of the Treasury.
This time however, our national debt ceiling is placed at 98% of our nation's Gross Domestic Product; much higher than it has ever been. Gross Domestic Product is basically all final finished products and services made within the borders of our nation. The GDP often acts as a collateral for the nation's debt. Sort of like when you buy a house. The mortgage company keeps the title of the house as collateral in exchange for you to have money to buy the house. When you fail to make your payments, or when you breach the contract with the mortgage company, they simply take your house and try to recover the money owed to them by selling it. At least that's the way it's suppose to work. So long as the national debt is under the value of the GDP, we're solvent. We could declare default and our creditors would come in and take the GDP up to how much is owed them.
With all the scaremongering in Washington D.C., I imagine the Republican party will cave in spite of outrage from the American people. They'll raise that debt ceiling without any change in spending habits which is what we ought to be doing. Why do I say that? Because the Republican party has not been showing much leadership lately. Sure, they came up with the Path to Prosperity while the Democrats are paralyzed by their altruism and twitted their thumbs. But the Democrats know that they still control the Senate and the White House, plus, Presidential elections are coming up and they want to make good on all their entitlement programs they promised during their campaigns. The Path to Prosperity really does nothing to attack the reason why we got into this debt crisis to begin with which are the entitlement programs. Despite what you may have heard from the Democrats accusing the Republican party of trying to give grandma the boot, the Republican's plan has no intention of getting rid of entitlement programs but rather just "fix" them so that they last longer. More like kicking the can down the road and putting off our own "Greek" debt crisis.
Last year this time, we were discussing how Greece found themselves with a debt crisis and a debt ratio being well over 120% of their GDP. The CATO Institute did an extensive study in the Greek debt crisis to find out what was the cause of this debt crisis and found some rather startling things. One was that 1 out of 4 workers in Greece was a public sector worker. That's 25% of the population of Greece on the public payroll, not to mention the outrageous benefits some of these public sector workers receive that included giving children of deceased workers full benefits including paychecks that would have other wise been earned. Now, I'm not saying that we're that bad off but we certainly are that close. The Kansas Watchdog Group found that in the state of Kansas, 1 out of 5 citizens are a government employee and in the state of Georgia, we find government employees making 6 figure incomes.
I'm not opposed to people making as much money as they can, but when it comes to public jobs that are paid for by the taxpayer, then it's a different story as it is a from of legalized stealing and certainly suggests that government can do whatever it wants with other people's money. Higher wages in government jobs also destroys man's incentive to innovate and produce in the private sector jobs because then everyone's aspiration is to work for the government and take control over others while destroying individual rights.
The solution to our problems is not the prolonging of entitlement benefits while cutting here and there. Keeping the entitlement benefits will only worsen the problems we face down the road. It has been typical of government to underestimate the cost of entitlement benefits because they fail to learn that people have a tendency to take advantage of welfare programs and government has the natural tendency to use welfare as a means to become absolutist and then we find ourselves right back where we are now with another debt crisis.
Also, another thing is that should we raise the debt ceiling, even just one last time, it does nothing to end the crisis but instead worsens the problem. As I said, we have hit the debt ceiling 3 times in the past already and all because of government's out-of-control spending. It's said that government is spending like a drunken sailor but the difference between the government and the drunken sailor is that when the drunken sailor runs out of money, they stop spending. Government on the other hand continues to spend like they've got money growing on trees. What with a printing press in their hands, and Keynesian economics ruling the show, their solution is to simply print more money which leads to inflation. Then we wonder why the price of food, gas, and other commodities are higher than they were just a few months ago.
We have got to make real government cuts and make the sacrifices needed to reverse the tide of this debt plague. 38 billion dollars didn't even scratch the surface of what's needed; especially since the government added 57 billion dollars in spending. The Republican party had a good start when they wanted 100 billion dollars in spending cuts and even that was not enough to save this nation from the debt crisis. Apparently, as I went to the townhall meeting with Mike Pompeo, he explained that the majority of calls he gets are from people who tell him that spending cuts are good, buuuuuut..... and they would tell him what they don't want cut such as water treatment projects, Social Security, Medicare, education, food assistance... and it goes on. It sounded to me just the exact source of the problem. Altruism.
The problem in America can be found in one sentence and that is, "America is Great, because America is Good." Everytime we find a problem that we think needs to be fixed, we run to the government. When we see homelessness, poor, and need for medical care, we run to the government. When we see a need such as clean water, affordable housing, and even gas for cars, we run to the government. We make demands that taxpayers pay for things they don't use regardless if they agree to it or not or if they even use the program. Heaven forbid that we should ever look to ourselves to solve our problems. And now this. The great fall of a once morally good nation is caused because people are more worried about having their 3 meals a day rather than worry about having a nation of individual rights in the next day. They trade a higher value for a lower value much like how Esau traded his birth right for a mess of pottage in the Old Testament of the Holy Bible.
What are we going to do folks? Are we Americans or are we the new United Soviet States of America? That's where we're heading if we don't stop the out of control spending in government and make the sacrifices needed to ensure that this nation will endure for many more generations to come.
Siska DeYoung
www.cato.org
www.usdebtclock.org
www.gao.gov
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