There are many serious subjects that I've thought about tackling in this blog recently. All sorts of crazy things have been going on in the world, and quite a few merit some serious reflection. Many of them are also quite controversial and cause tempers to flare. So I've done plenty of thinking about whether or not I should address any of these issues, and how I should go about doing so. One of these subjects is debt. Specifically, the national debt, and why it's the constant problem that it is. This may be a lengthy post, because I'm going to try to cover all the bases that need to be covered and not leave any gaps. Having said that, I could write a book about the subject, indeed, many already have, and still not cover everything. The nation's problems will not be solved in the space of one blog posting, but I hope this will turn out to be thought-provoking and perhaps help you reconsider how you evaluate what you hear and read in the news.
It's important to understand some of the terms in the discussion. The deficit is the amount that the federal government spends beyond what it takes in every fiscal year. (For instance, if the government takes in $500 and spends $600, the result is a $100 deficit.) The debt is the total of all the previous deficits that still remain. (If we incur a $100 deficit for ten years in a row and make no progress on paying the balance, the debt is $1000, plus interest.) The government has managed to operate under deficits for decades, and as a result our current national debt is approximately $11.5 trillion. It is probably safe to say that our country has more debt than has ever been held in the history of the world. The reason we have not yet had a major collapse, like Greece experienced recently, is that we are not capable of defaulting on our payments because we print our own currency. Greece, as a member of the European Union, did not print its own currency.
This is a good thing to keep in mind when you hear news reports about upcoming budget negotiations. Talk about the catastrophe of bills being unpaid is just that: talk. The government takes in enough every month to pay what it needs to pay on our obligations. This does not mean that higher deficits are not a problem; merely that the problem is bad rather than horribly bad. But no single political party or President has caused this to happen, and no single group or President will drive us "over the cliff," so to speak. The talk of crisis is ginned-up hyperbole made to take advantage of the fact that people will allow for drastic measures in a crisis that they will not accept in a normal situation. Thus, those who want to make big changes create a climate of crisis in order to achieve their goals. (Please understand, I'm not saying that the crisis is never real; just that you should immediately pay close attention when you hear the term used.)
But deficits are not good, and the presence of deficits puts strain on our financial system. The government has certain obligations that it must meet--funding the military, paying for government employees, etc.--and deficits show us a government that incurs more obligations than it can afford. A government that routinely runs up massive deficits is probably spending far more than it should, and taxpayers should have no problem asking if the taxes they are paying are being used wisely. It is a subject for a different discussion that there are many worthy things that receive government funding, but perhaps that is not the best source of funding for those things. Heated debates have been held over cutting military funding or cutting money to PBS, but all too rarely do these debates touch on the real source of the problem: spending too much money.
The uncomfortable truth of the matter is that all deficits are always the result of spending too much. There is no other way to create a deficit than to spend more than is taken in. Those who are in the habit of overspending rarely lose that habit when they get more money. More often, they respond to financial windfall by spending even more and winding up with more debt. The reason that our government is constantly in negotiations on raising the debt ceiling is that there has been no effort to restrain the spending that created the debt in the first place. (Doesn't it defeat the purpose of having a debt ceiling if we can just raise it any time we want?) The constant drumbeat of raising taxes (again, another subject for a different post) is a result of the fact that we are not generating enough money to cover all the expenditures we make. Of course, in Washington, convincing people to cut spending is like convincing them to cut off their own arms. Politicians have constituents who like their federal money, and the threat of losing election campaign support or alienating the voters makes them reluctant to cut anything. Add to this the modern media culture, in which no distinction is ever made between reducing spending for a thing and cutting that spending entirely out of the budget. (And as a member of the military, yes, I do not want my pay and benefits, or even my job, cut. I still will maintain that there is probably wasteful spending in the military budget that can be cut without drastically affecting those currently serving and without compromising the safety of the nation.)
The solution to our debt problem is simple: stop spending so much. But simple does not mean easy. We are in many ways the most prosperous nation on earth, but history shows us that prosperity will eventually end if it is not used responsibly. When more money is printed, the currency is devalued. When debt is held by foreign nations, they gain leverage over us both in trade and in diplomatic issues. As long as we continue to take half-measures to address the problem and as long as we refuse to pass a responsible budget (well, any budget), this issue is going to come up again, and again, and again. If we really want to get our fiscal house in order, we have to stop spending more money than we have.