Can we escape the crushing consequences of our national debt?
In debating the national debt limit in 2006, a relatively unknown U.S. senator argued that its increase was "a sign of leadership failure...a sign that the government can't pay its own bills...[and] a sign that we now depend on financial assistance from foreign countries to finance the government's reckless fiscal policies." Yet those words fell on deaf ears. For since Barack Obama's impassioned comments, over six trillion dollars in debt has accumulated: 3.7 trillion of which since the day he was inaugurated.
As this year's budget drama unfolds yet again, the struggle over federal spending pervades partisan debate. With yearly deficits of $1.7 trillion, a national debt over eight times that amount, the federal government borrowing 41 cents for every dollar it spends, and the cumulative depth of red ink more than ninety percent of gross domestic product, many seek scapegoats for the mortgage most willingly underwrote.
Everyone acknowledges the problem yet few admit its source. At center is the conflict between personal aggrandizement and national benefit. Perpetuating fiscal irresponsibility is a public demanding increasing government service for its support and politicians ensuring reelection with future credit. As captives between mutually reinforcing egocentricities, each imprisons the other while those unborn are twice hostage to present self-interest and future economic collapse.
That monetary recklessness threatens future prosperity is inevitable. With yearly service on the national debt over $400 billion, its annual interest over the last decade insatiably cannibalizing each tax dollar, and a Madoffesque budget "balanced" with new credit paying off old debt, expenditures are made for which nothing is purchased. Accordingly, such irresponsibility increasingly consumes revenue needed to repair infrastructure, fund medical research, and build schools and hospitals. And as the American Dream becomes a Ponzi scheme nightmare of diminishing living standards, blameless millions are destined to owe money borrowed before their birth.
As for any addiction, reckless spending is difficult to stop. This is as true for consumers addicted to "plastic money" as it is for politicians spending dollars never earned on constituent needs never satisfied. Never mind that the debt share for each American is $46,000. Proposals to cut spending are met with hysteria. Never mind that economists describe debts of more than 60% of GDP as "unhealthy." The accumulated federal shortfall is forecast to balloon to over a 100% of GDP by 2012. Never mind that budgetary liability grows by four billion dollars every day. And never mind that accumulated debt is so vast that Congress has shamelessly established a website requesting online donations to pay it off.
What makes budget trimming so difficult is that Congressional benefits of bulletproof incumbency are local while negative consequences of growing debt are widespread, easy to blamelessly sidestep, and for many, difficult to see and understand. During the 1930s, Hoovervilles were undeniable evidence that extraordinary measures were necessary to prevent a total economic collapse. However, unlike the financial failure of eighty years ago, the wolf is less visible at our door. Because of this, few recognize impending disaster. And while "what me worry" myopia from Alfred E. Neumann's economic playbook led to calamity in 1929, eight decades later such blindness threatens a repeat performance.
Although there is still debate over how catastrophic the ongoing hemorrhage of red ink will be, the immediate question is what to do about it. Typically, Republicans favor decreased spending while Democrats support increased taxation from a privileged class seen as callously indifferent to the economic plight of those less fortunate. Yet however blind to suffering the affluent may actually be, the indisputable fact is such speculation is unsupported by an upper class tax burden in which the top 10% of earners contribute over 70% of all federal tax revenues while the bottom half contribute less than 3%. And while fashionable to claim that in loopholes and tax cuts the rich get something for nothing, the only people getting something for nothing are the 71 million adult Americans federally benefiting from defense, public safety, education, and infrastructure repair, who contribute nothing to their maintenance.
Current tax inequities and the impending fiscal disaster notwithstanding, unless the public views champagne tastes and beer pocketbooks as much a public problem as a personal one, federal debt will continue to grow. And unless this realization results in overwhelming constituent pressure for Congress to break the cycle of taxing much and spending more, such folly will continue as a tragedy and an irony: a tragedy because the wolf is already at our door and an irony because in the two hundredth and thirty- fourth year of our republic, we have increasingly become captive not to foreign invaders but to ourselves.
Neil Bright is a professor of American government and psychology, who lives in New York State.