Deficit Reduction, or Get Yours Now
Some semi-civil societies and certain religions believe that charging interest for borrowing money is a bad thing, a sin. And some have essentially concluded that borrowing money is evil in-and-of-itself. To be fair, in some respects they may be right. An individual who borrows so much that he or she may never be debt free is tantamount to being conscripted to those who loaned the money. This has occurred throughout history, and it is still occurring; that’s why some states have laws against pay-day loans and the like.
To be up-front about my views: I think personal, corporate, and government debt is not a bad thing. But for this column, I would like to focus on government debt.
- When we have large amounts of public debt that can affect the future functioning of our economy, does such a situation run the risk of conscripting future generations into paying for our current spending?
- Even though we justify that some of our immediate indulgences are for our children and grandchildren, do we effectively enroll them in a scheme to pay for our indulgences when we borrow more than we are able to pay back?
- Do we enlist our descendants into working for the government without asking them, which will limit their decisions as to how they may want to live their lives?
- Do we limit their freedoms by our actions?
- How do we, as a nation, make decisions to borrow and spend money?
- Why do we do what we do?
Trying to Answer the Questions
For years I questioned how we could run up so much debt; debt that we weren’t able to repay.
Without getting into business cycles, the funding of wars, inflation, and global trends, I understood from 8th grade grade civics that Congress, not the President, had the power of the purse; meaning they appropriated the money to run the “government.” So a number of years ago I decided to correlate the composition of Congress to our federal spending. That means I wanted to know who in Congress made the decisions on federal spending that affects whether we have a deficit or a surplus; which when taken in the aggregate over many years is what creates our national debt which is now around $18 trillion.
The top part of the chart graphs the federal deficits (lavender) and surpluses (green) as authorized by Congress since 1940. Even though the composition of Congress on this chart dates back to 1879, I thought that graphing Congressional spending back that far without lots of qualifiers for wars, recessions and depressions might sully the discussion as to who is spending our money which has created our massive debt.
Keep in mind that debt, not unfettered debt, is one of the foundational mechanisms in a successful capitalistic economy. It is one of the key tools in creating great opportunities for individuals and can create great wealth; ask Sam Walton.
This graphic is intended to help us become more aware as to who is responsible for our deficits and who is responsible for debt reduction. (See the vertical brown stripes)
So, the next time you dream of your children’s future and you wonder how they will fair in the world of the future, be aware that your decisions today, your vote, will determine how much our kids will spend on things for us. Your vote will shape their future.
For those who don’t have children or grandchildren…then you may or may not care about the future. Indulge yourself. Get those rug-rats to pay for all you can. Get yours now.