So our economy is in the tank and all the savvy politicos are demanding that we bail out the Wall Street fat cats to the tune of seven hundred billion dollars. Most people can't even really comprehend that amount of money. To make it more real world, that is the money that our nation spends on importing oil every year.
Since President Bush took office the national debt has doubled. When President Clinton left office at the end of eight years the federal budget was balanced and there was a surplus of several hundred billion dollars a year which was being paid on the debt. Our nation was on the way to becoming debt free within ten years. This despite a war of liberation in Bosnia aimed (successfully) to end the genocide of a people.
Right now, after eight years of Republican control, the national debt has increased to $9,791,951,982,217.43 That is essentially double what it was when President Bush took office and would be $32,125.92 owed by every man, woman and child in the country. Every year our government takes in far less money in taxes than it spends. Despite this the Republicans keep making promises to cut taxes which will only further decrease our national income and thereby increase the deficit and the debt. I know it sounds good when they do it and it gets them elected but, when you stop to think about it, there is a certain insanity to it.
Ronald Reagan first popularized the idea of spending more than we have (deficit spending) as a good thing. It all sounded so good on paper. We could have more than our means would allow and never have to repay the money we were borrowing because the market would take care of us all. Like most things that look good on paper, that didn't fly so well in the real world.
In the real world it is pretty easy for anyone to understand. You don't need a degree in economics to understand what happens when you spend more than you make. Imagine living your life that way. You spend a couple years living high on the hog, you run up $100,000.00 in credit card debt, you buy a $500,000.00 house on a 50-year, interest only loan and then take out a second mortgage for $100,000.00 to put in an in-ground swimming pool and tennis court. Now you are almost a million dollars in debt and before you know it you are taking out small loans to cover your shortfall every month.
This is exactly what we have done as a nation and today we are on the verge of adding another 700 billion to that total debt which will bring the total to $10,491,951,982,217.43. That is 10.5 TRILLION dollars. Or, $34,422.52 per citizen. I know, I know, what is a couple more thousand per citizen, right? That would make the bill for the average family of four to be $137,690.08. Then if you factor in the homeless and those living at or below the poverty level, who will never be able to repay their share of the debt, you probably add on another 25% for a total current per family debt of $172,112.60. That is YOUR debt my friend, added onto your personal debt and eventually that debt too will have to be paid.
So where does that money come from? Do you have it in your budget? Maybe, if you throw in your retirement. Oh wait, that is worthless now. Or your kids' college money (if that still exists), or if you take out a second 30-year mortgage on the full equity you have in your house (if you haven't been foreclosed on yet). Yeah, I guess if we all chip in everything we have, we will get through this just fine. It will be just like starting over in life, won't it? There is almost a sort of nostalgic romance in that idea.
There is a different way to live, though. Some people don't spend more money than they earn. They even manage to save money and invest that savings into our economy. When they have to go into debt for a major purchase they do so carefully, knowing that they can repay that debt and still have the lifestyle that they want. Maybe they don't have the biggest house or the flashiest car in town but they are secure. If they need extra money they work overtime or get a second job.
That is the perspective from which I see the two major political parties right now. The Republicans use the term "tax and spend" to describe the Democrats, but isn't that just good financial policy? If the people of the United States want or need more services then they have to realize that these things have to be paid for and the only way to do it is to raise the money through increased taxes or by cutting other programs. If on the other hand we don't want increased taxes then we have to learn to live without the things that we don't need as a nation and spend our money on the things that we do need. That policy leaves more money in the hands of individual consumers who will spend it and grow the economy.
The Republicans on the other hand seem to have a policy of "spend and spend". When they reduce taxes and increase spending there is no other possible outcome than to drive us all into debt. The extra money that consumers have because of those tax reductions or cash handouts is not "real" money because it is money that should be being spent elsewhere — just like the person above who is spending money on themselves each week instead of paying on their debt. Sure it is nice because you make yourself believe that you have all this extra money but really it doesn't exist because it is money that belongs on your house or car or credit card debt. So eventually it all has to crash.
Now we are at the point of that crash. It was inevitable and yet people act as though it is a huge surprise. The Republicans, as usual, have learned nothing. They think that they can borrow their way out of this one, too. But whatever money they borrow will not be real money because it should be spent on our debts. I am sure that they will be talking up more tax cuts, too, as a way to stimulate the economy and sure, that will increase spending in the short term but in the long term it will just keep our artificial economy afloat a little longer while our debts continue to accumulate in a shoe box on the desk.
It is time that we get our heads out of this dream world and start to live like responsible people. The Republican fantasy of spend and spend with no consequence is over. Now it is time for the real Americans, people like you and me, who know the value of the money we earn because we work hard for it, to stand up and say enough is enough. Time for a change. Time to elect people who understand real fiscal responsibility because they practice it in their lives and in running the country. Time to face the fact that our bills have come due and we are going to have to shoulder the responsibility for them.