Many people are confused about the difference between the National Debt and the National Deficit.
Our nation is in a hole that is $14 trillion deep. That is the National Debt. As the saying goes before you worry about how to get out of the hole you have to stop digging it deeper. Currently we are digging the hole deeper to the tune of $1.45 Trillion a year. That is the National deficit.
Many people are also having trouble balancing their personal budgets, but at least they can understand the basic concepts. Government is harder to understand but basically it is similar to our personal budgets.
If you look at the expenses in your budget, you pay so much for food, so much for the car, so much for the house etc. Suppose you put everything on one credit card.
The major expense for most of us is the rent or house payment. For the Government the major expense is the military, so paying for the people that protect our country is sort of like paying for the right to live in the house.
Some people will object and say that the major Government cost is health, but the "Entitlements" like Medicare and Social Security are separate from the budget.
Medicare would be like Health Insurance in your personal budget, and Social Security would be similar to your pension or IRA. Yes you pay for them, and in many families the Health Insurance is more than the house payments, but you don't want to just stop paying on them.
When times are tough and you have maxed out your credit cards, you cut out the frills first. You stop eating out so much, you don't buy as much clothes. You try to cut your expenses to match your salary. But once you do that, you can't just stop paying your credit card bill. The interest will keep adding to your debt, and pretty soon they will haul your car away and you may loose the house. You made contractual obligations to buy that fancy car, and you may have bought a house that is bigger than you can afford, but you are still obligated to pay for them.
Our nation bought the best. Our interstate highway system and the hundreds of billions we spend on corporate welfare to the oil companies are similar to the fancy car. But now that car is getting old and rusty, but we can't afford to buy a new one.
Our military is the best in the world and we spend more on it than the rest of the world combined. We started two wars and put that all on the credit card. We might have bought more house than we can afford.
Many of the military costs are hidden, like all of the nuclear weapons being in the Energy budget. Under Bush the costs of the wars were never included in the budget, now they are which makes the Obama deficit look larger. Then there are the real black budget items, hidden even from Congress, like the clandestine operations. No one knows how much we pay for our "Private Contractors" (Mercenaries). We had just as many private contractors in Iraq as we had troops, and while we hear that the Iraq troops are coming home, I haven't heard about the contractors coming home.
We pay $1 million per year for each soldier in the field. We pay as much as five times as much for private contractors to do the same job. We now have 100,000 troops in Afghanistan and a similar number of mercenaries. Nobody knows how much the mercenaries cost but they all go on the credit card.
The official figures are that the military is about 65% of discretionary spending (the part of the budget we can cut), but the portion of the National Debt that is due to the military, past and current wars, and the costs of medical treatments to our wounded and military pensions etc. is much greater.
http://www.warresisters.org/pages/piecha...People have to work to make the money to pay their bills and the government has to tax people to pay its obligations. Few people would work for free and few people would pay taxes if they could get out of it, but that is the cost of living in the best country in the world with the best (albeit crumbling) infrastructure, and a military second to none. We made the purchases, now we have to pay for them.
The country has been cutting the frills for many years now. Our schools, highways, bridges, water and sewage systems, all need repair. Yet we have the lowest tax rates of most nations. The average homeowner is over taxed, because the tax burden has been shifted from the rich, to the middle classes. The rich used to pay up to 90% (during times of war like now), but are now only paying 16.6%, and the corporations used to pay a much greater portion of the taxes (now 3/4ths pay no taxes).
http://money.cnn.com/2008/08/12/news/eco...Republicans think that we can just stop spending everything and that they shouldn't have to pay any taxes. But the family has to eat, and the house payment and the car bills still come. Even if we could magically make all government disappear as most conservatives wish would happen, and stopped all government spending We would still have about $400 billion a year just in interest payments on the National Debt.
It is not enough that we cut our spending and balance our budget, we still have to pay off the principle on our loans before we can be financially free again.
Some on the far right want to just declare bankruptcy and go and live in the wilderness, but these same right wingers are the ones that insisted on the biggest military, and they are the ones that insisted on starting unnecessary wars. Now they want to walk out of their obligations and leave the bill to someone else?
They talk about taking their country back as if the liberals are the ones that forced them to buy too big a house, NO! it was the Right that signed the papers that put the nation in debt. The Republicans accumulated between 80% and 90% of the National Debt, and yet they are the ones that don't want to pay their bills! If they want to be truly free they will first have to pay off their obligations, then they can talk to the Chinese and Japanese about getting their country back.
At the end of this year the Bush Tax cuts will expire. This will produce about $2 trillion, enough to balance our budget and cut the deficit to zero.
http://www.cnn.com/video/#/video/us/2010/08/01/gps.fareed.take.8.01.cnn
Alan Greenspan has recommended allowing all of the cuts to expire so we can cut the deficit.
http://www.bloomberg.com/news/2010-07-15...Obama promised to continue the tax cuts for 98% of the people only allowing the cuts for the top 2% to lapse, which would provide about $700 billion in revenue, which would pay for about half the deficit.
http://www.bloomberg.com/news/2010-07-15... The Treasury Secretary said that allowing the tax cuts on 2% of the people would not hurt the economy.
http://www.huffingtonpost.com/2010/07/25...The party of No has insisted on every single bill, that it would be better if Congress did nothing. Now if Congress does nothing, almost every American will see their tax bill go up to the levels which brought prosperity and a balanced budget during Clinton's tenure.
The Democrats and Obama would rather have 98% of the people continue with their tax cuts. Our Nation needs this stimulus to pull us out of this recession. If the middle class and small businesses are taxed more, it could prolong the recession or make the economy get even worse.
If the Party of No says No to this bill, it is the Republicans that will be raising taxes on 98% of the people.
After the country is on firmer economic ground, the entire tax structure should be restructured and we should start making payments on the principle of our debt, and also start rebuilding our crumbling infrastructure. Tax Reform will be a separate rant.
This month marks the third year since the bridge collapsed crossing the Mississippi River in Minnesota, killing 13 people and injuring 140. Recently two dams collapsed flooding the valleys downriver. At some point ignoring our infrastructure will be more expensive than maintenance, and at some point if we allow the National Debt to accumulate, just the interest payments will be more than all of the other government expenses.
We need to start thinking of the future and become fiscally responsible.