by Beth Grimes
We Americans carry a lot of credit card debt. Of course, we’re required to pay it back or at least keep the finance charges paid.
The nation’s credit card is also over-loaded and our nation, too, must pay finance charges. Our national debt is in the neighborhood of nine trillion bucks. That’s trillion with a “t,” folks. A billion is a “one” followed by nine zeroes, a thousand millions. A trillion is a one followed by twelve zeroes. Most of us have trouble wrapping our minds around a billion, let alone a trillion.
Will that ever be paid off? We’ll see. We’ve faced a worse debt problem. Presidents Truman Kennedy, Johnson and Carter eliminated most of the WWII debt. Republicans Eisenhower and Nixon did their part, but their Republican administrations were dominated less by ideology than is the present one.
So how did our leaders get us in hock up to our ear lobes? It was easy. The government just spent more money every year than the revenue it received, creating annual deficits. Our debt is the total of those deficits.
So we, our nation, all of us, owe a gargantuan sum of money. The government copes with deficits and ever-ballooning debt by borrowing money. It does this by issuing U.S. securities: treasury bonds, notes and bills. Promises to pay. Don’t you wish you could do that? Of course, the government must pay interest on those securities or no one would buy them. The money to pay that interest has to come from – who else? Us. American taxpayers.
For many years, United States investors bought most of these securities. After a time, American individuals and institutions could no longer buy enough to finance all the borrowing, and we started selling them to foreign countries. Japan, China and Saudi Arabia, for example. That makes us vulnerable, because the value of our dollar has been supported by foreign purchases of our treasuries.
In a good year, fiscally speaking, our leaders could stop spending like drunken sailors and balance income with outgo, thereby; diminishing the money we have to pay for interest on the debt, by just not increasing it. Don’t hold your breath waiting for that to happen.
The United States has a big, complicated economy, so it’s no surprise that it has a big, complicated federal budget. Think of the federal budget as composed of trust funds, i.e. the Highway Trust Fund, Social Security, Medicare, etc. plus the General Fund. Taxes of different kinds supply money for all of the above. According to the White House Budget Office, in 2006 the Federal government collected $2.3 trillion tax dollars. Forty-four % in individual income taxes, 37% social security and retirement taxes, 12% corporate income taxes on profits, 3% excise/sales and use tax, and 4% other sources.
The part of the budget not obligated to be spent for a specified purpose is called the General Fund. It is the money pot from which Congress and the White House spend your income taxes and those of profit making enterprises. Its budget is called “Discretionary,” meaning that Congress and the Administration get to decide how to spread it around.
Since we taxpayers are footing the bill for borrowing costs on all this spending, let’s see who’s getting the money. The Discretionary Fund Spending Request for FY 2007 is $871 billion. Of that amount, approximately half is for defense. That proportion rises to more than half if we add Veterans Administration outlays to those of the Defense Budget. And we should. What’s worse, the staggering dollar cost of Defense Department operations in the spending bill does not include most Iraq and Afghanistan military costs.
We do not need to keep fighting a so-called war on terror. As the American public is beginning to realize, the Iraq war is for control of a diminishing resource, oil. Such control will help huge energy giants maintain or increase their profit margins. It is a war to justify throwing money at corporations that make hardware for battle. It is a war to provide funds for the worthless Homeland Security Department. It is all of those and much more. We are a nation drowning in debt on which we pay the finance charges. Having been given lavish tax cuts, the wealthiest Americans have been spared the pain of paying much of those charges.
The source of money thrown down the rat holes of war and preferential treatment for some is you and me, babe. So we should take it personally.
What else could we have bought for all that spending? Start with infrastructure. We live in a country where bridges fall down and levees break. Repairing those would save lives and create jobs.
We live in a country that does not provide health care for everyone as does every other industrialized nation in the world. Our life expectancy is lower than that in 41 other nations. Our infant mortality rate is higher than most of the developed world – just above Latvia which is at the bottom. Health insurance in the USA covers a smaller percentage of our population compared to other rich countries. You think maybe that’s why we lose more of our babies and live shorter lives?
Our nation compares unfavorably with other industrialized countries in spending on transportation and education and 37 million Americans live in poverty, an increase of 1.1 million just last year.
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