Reaching the point of too much national debt

Most understand that some national debt may be preferable. But as in most things in life, one can have too much of a good deal. One can “kill the goose that lays the golden egg”. Have we Americans reached that point, or even surpassed it? Are we voters just as guilty as our English ancestors when we accused them of taxation without representation? Is the analogy to our descendents getting the debt burden without being able to vote on it today appropriate?

One present day buzz word for too much national debt is “out of control federal spending”. This idea may not be too alarming, but the examples can be. One is the “bridge to nowhere” in Alaska that spends about $250 million for a bridge that benefits less than 100 citizens, plus those that build the bridge. Another is a recent House bill to reimburse some Guam citizens for Japanese war crimes. On the face of it, this is absurd. In both cases, the federal government does not collect enough taxes to pay for all this, so more borrowing to pay the bills goes on. Like in a marriage, one can argue what part of the income does pay what bills, so some of it is covered while some of it is wasteful, or can be postponed. But in the aggregate, the federal government spends more than it collects, and it borrows to pay the total bills.

One idea that should be a cause for concern to all patriots is simple. When voters learn they can vote themselves benefits and monies from the public treasury without “apparent” consequences, and their elected public servants learn to feed this most despicable human tendency, then American society has entered a slippery slope from which recovery is difficult at best, and future ruin is more probable. This situation is analogous to “killing the goose that lays the golden egg”.

Most think voters and taxpayers of today and tomorrow will willingly go into debt as part of defending our country and way of life in a war. Now that is a national emergency. But when congressmen and congresswomen create new categories for emergencies that are less than that of war, and allow them to spend to where borrowing is required, then a “tipping point” has been passed.

Of course the usual arguments are that this spending is for things that voters want, and the spending benefits voters, and also the spending is a jobs program that benefits some citizens. And from the Congress’s point of view, if it keeps getting them elected, then that is good too … for Congress. The usual line follows something like “one man’s pork is another man’s good idea”. And as long as people keep lending money to finance all this excess spending, that is fine, especially if the debt is owned mostly by Americans who do receive the interest payments. A lesser line sometimes heard is that of a political strategy, often attributed to Reagan. If he gave the Congress enough rope to overspend, with him signing the spending legislation, then eventually it would catch up and prompt some spending restrictions and control in the future. There is some reason to think this theory may have some basis in history.

The most difficult thing for a citizen who votes and is trying to sort out this subject of “possible out of control spending” is, well, trying to figure it all out. The arguments and facts are all over the place, some academic, some just theoretical, and some more practical. Who knows just what to believe? Here is one chart about what to believe.




This chart, even if it is not completely accurate, points out the percentage of our American national debt that has been loaned as of 2005 by Social Security. Anyone can look at their pay stub and know how much of their income, and their company’s income, has been collected and sent to the treasury just during this pay period. It’s a big percentage, and a big number, and that is the point of this post. Have we as a Nation gone too far in borrowing from our social security future with all its promises. Have we “killed the goose that lays the golden egg”? Let’s take the theory out of this and just be practical. Social security is not a retirement plan, though some try use it that way. But the social security benefits (payments) are enormous now and will grow dramatically as the population bulge known as the baby boom generation steps up to the trough for their time of benefits. And there is not a penny in the bank to pay them, except promises to do so. Almost all know Social Security has always been a pay as you go system, so those getting benefits in the 1940’s for example got more from the system than they ever paid in. As long as America had over 30 workers supporting one beneficiary, this social compact worked, and it still works today. But the trend lines due to demographics and uncontrolled spending are reducing this ratio to much less than 5 to 1, that is 5 workers and their companies paying enough taxes to honor all the obligations promised earlier by our own elected representatives. Many married couples set enough money aside to tide themselves over. It appears our federal government has not been as smart.

The potential impacts are all very scary. Our descendents, all future taxpaying workers if healthy, may object to the taxes they have to pay just to meet the earlier promised social security obligations, and for which they could not vote at the time. Of such circumstances are born revolutions. And then perhaps we’ll revert to the older fashioned social security problem solution … birth rates and having more kids to take care of ancestors. The last possible impact is also scary … that of the lost faith in a system that collapses like a house of cards that even drags down those retirement plans and promises when they go broke or underfunded.

Fortunately, “chicken little” may not be alive and well. We citizens and voters can step in, if we choose to do so, and act in our own behalf. The politicians will have to follow if they want to stay in office. This is a National Security issue, a common issue, and is so important to our national future that one hopes we act. To not do so is to pass the decisions to our progeny, who like us, will act in their behalf. We may not like what they decide.