Does the National Debt Even Matter?

Fights over money are fights over priorities. If one member of a family wishes to spend $500 on a computer or television, and another member of the family wishes to save it, or spend it on a vacation, it’s because of differing priorities.

It’s the same in politics and government. One interest group wants money spent on defense, arguing that it’s the most important role of the federal government (not to mention the only one really mandated by the Constitution). Another set of interest groups wishes to spend money on maintaining or expanding social welfare or social insurance programs.

A household or individual may desire a champagne diet on only a beer budget. For a time, the household or individual may struggle to evade this fact, and spend a beer salary on the equivalent of champagne anyway—but sooner or later it catches up with them, because one may only evade facts for so long. Eventually cars are repossessed, houses foreclosed, or bankruptcy proceedings loom. Unless, of course, spending behaviors are confronted and reversed.

When I read of the continuing calamity known as the federal budget, debt, and deficit in Washington D.C., I see much more than simply political squabbling or differing priorities. Those things obviously do exist. But the real overriding theme of it all is a desperate, loud and talkative—at times, even pseudo-sophisticated—effort not to face the fact that the government is spending way, way beyond what the taxpaying population will ever be able to pay. The best indication of this fact is the trillions of dollars in federal debt, which theoretically has to be ‘paid back’ but in reality never can be, nor will be.

Nobody in either party, or in any area of government, appears to act or speak as if the debt is that big a deal. What will actually happen as the debt is allowed to grow, and grow and grow—as on our current path it must, not only because of the big spending habits of Obama and the Congress, but because of Medicare and Medicaid/Obamacare alone? Keep in mind that the current ‘sequestration,’ considered so radical, is only a tiny decrease in the rate of increase in government spending for the year (according, at least, to the Cato Institute.)

Imagine if it could have been demonstrated, back when Social Security and Medicare were initially passed decades ago, that these programs would eventually swallow up most of the federal budget—way surpassing defense—and lead to a $16 trillion debt or higher? What defense would Franklin D. Roosevelt and Lyndon B. Johnson—the Obamas of their time—have provided for implementing these programs anyway?

They certainly couldn’t have said, ‘It’s worth it to help those unable to get retirement or health insurance on their own.’ For one thing, these programs have monopolized and essentially taken over the bulk of what would have otherwise been a competing, private marketplace for these services. In order to make sure health and retirement insurance are free for everyone, the government has for all practical purposes only made it possible for the vast majority to go exclusively through the government for these needed items.

This has the effect, quite naturally, of becoming expensive. Government could just as easily have done this with automobiles, groceries or haircuts. Had they done so, these products would similarly have gone up in cost and essentially have become impossible for anyone to afford outside of a government program. In the process, we would have had an even higher national debt than we have now.

Members of both parties blame each other for immaturity, irrationality and unfairness. This so reminds me of a warring married couple who get to the point of not really caring what the truth is, but simply blaming the other and making sure that others in their family/community circle see it the way they wish them to see it.

Unfortunately, these Democrats and Republicans cannot get a divorce. Regardless of whether we have one political party or a hundred of them, the fact remains: Government debts will continue to grow massively, because the biggest growth of the government budget—entitlement programs such as Social Security and Medicare/Medicaid—cannot be paid for by the economy as we know it.

Even if the economy grew by leaps and bounds again, it would not be enough. The math simply doesn’t add up. And even in a thriving economy, the Congress and President—especially the President we have right now—would spend that money faster than it would come in. Government spending is truly like a cocaine or heroin addiction, in this sense: The more we don’t have, the more we spend; the more we do have, the more we spend.

Economists seem to suggest that the debt doesn’t really matter, after all. Why not? Because, they claim, the U.S. dollar is still more or less the ‘gold standard’ or unit of monetary value of the world. I can’t wrap my mind around this as a reassurance. If it were true, then why do we even bother worrying about debts or deficits as all, as both parties claim to do? Why doesn’t the U.S. government just ‘print’ or create an endless supply of dollar currency, to provide for unending growth in Medicare, Social Security and all the other programs yet to come?

Also, doesn’t this false reassurance that the debt doesn’t matter presuppose that no other economy in the world—a freer one than the United States now is—won’t rise and eventually overtake us? Or even a fascist but nevertheless growing economy such as China, who could easily pose a military threat to a weakening and bankrupt United States? Not to mention the terrorist rogues out there, such as Iran?

The idea that the U.S. will always be fine no matter what makes me think of what people say after accidents or tragedies. Without fail, they say something like, ‘You believe it can’t happen to you. You know that’s not rational, but until the worst happens—you don’t think it was possible to you.’

This seems to me the mindset of the majority of Americans, as well as the majority of our officials in government. All the screaming and finger-pointing in Washington D.C. is a massive struggle not to know, not to think—and to somehow believe that if we shout and blame away the facts, they won’t be there.

There are solutions, but only the ones nobody will say and most do not want to hear. Entitlement programs, along with similar programs such as agricultural subsidies and all the rest, were a mistake. They were wrong and impractical. The federal government must steadily and systematically privatize, and cut itself down to the size mandated by the original Constitutional limits. It will take years and it won’t always be pretty, but the alternative—the consequences of unlimited debt and spending—are far worse.


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