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Taking a Stand on Our National Debt

Taking a Stand on Our National Debt

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Published by: Wellington Publications on Aug 17, 2011
Copyright:Attribution Non-commercial

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07/22/2013

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Taking A Stand On Our National Debt:A Dialogue
The author has chosen to use a question-answer format in order to make the often complexsubject matter, easier and more enjoyable to read. Q and A is not a dialogue between real people.The author has provided the dialogue for both Q, standing for Quaero, which in Latin means “Isearch for” and A, Auctor; which in Latin means “person responsible.”
Q
- I understand you have been following the federal budget process closely for the past tenyears. How did you get interested in a subject that most people find extremely boring as well ascomplicated?
A
- My interest can be traced to 1982 and the formation of the Grace Commission.
Q
- What is the Grace Commission?
A
- The Grace Commission, originally known as the President's Private Sector Survey on CostControl was established in February 1982 when President Reagan asked prominent businessman,J. Peter Grace to head a commission for the purpose of conducting a comprehensive study of government spending. The Commission was privately funded and consisted of one hundredsixty-one high-level private business executives familiar with cost control and efficiency.When the Commission began its work I eagerly anticipated the results, naively thinking theywould come up with a relatively quick and easy way out of our national debt problems.
Q
- It sure looks like they didn't do their job.
A
- Oh but they did. The Commission originally came up with 2,478 recommendations, which if implemented, would have saved $424.2 billion over three years.
Q
- Then they didn't follow through?
A
- More than half, 1,426 proposals had been implemented by the end of fiscal year 1987.
Q
- Then why does our debt keep growing?
A
- Eliminating waste is only one part of the problem. Our elected officials have continued on anunprecedented spending spree. You've no doubt heard that it took two hundred and four years toaccumulate the nation's first one trillion of debt but only four years to accumulate the secondtrillion.
Q
- Which four years?
A
-1981-1985. The debt ceiling was raised in 1985 to $1.823 trillion and then again in 1986 to$2.3 trillion. But, as was so often said during the eighties, “You, ain't seen nothing yet!” With
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nobody seeming to care, our elected officials kept spending. In 1990 the ceiling had to be raisedto three and a half trillion. The spending continued so that in 1991 the debt ceiling quietly passedthe four trillion mark.
Q
-You're right. I didn't hear anything about it, and if I had I wouldn't know what to make of it.This may sound stupid, but I doubt that I'm the only one confused about how the deficit ismeasured. It seems there are a lot of very different numbers out there all claiming to be thedeficit.
A
- You're absolutely right to be confused and your confusion is the result of intentionalobfuscation.There are baseline deficits, policy deficits, on-budget deficits, off-budget deficits, deficits whichcompare last year's spending with this years, deficits that count any increase less than the rate of inflation as a cut, deficits that count any spending less than last years as a cut, deficits that countthe Social Security trust fund surplus and deficits that do not, deficits that include the cost of thewar in the Gulf and the savings and loan bail out and deficits that don't, deficits that includegovernment liabilities in the form of guaranties, loans, deposits, mortgages and promises whichmust be kept to pay health and retirement benefits to federal employees or veterans or other entitled beneficiaries and deficits that don't.And then there is the debt; the accumulation of annual deficits. If you were to count futureliabilities of the federal government as debt, you'd get another and even more astronomicalfigure.
Q
- Unbelievable! We’re not getting true figures any year and certainly not about theaccumulated debt. Economists and politicians don’t seem to care that much so I wonder—dodeficits really matter?
A
- There are as many opinions as there are economists. And I'm convinced that's all they are,opinions, no matter how many charts and figures they come up with. Some economists insist thatexcessive government spending encourages demand which reduces savings, drives up interestrates and inhibits investment and economic growth.
Q
- I've heard that it makes no difference, as long as government is going to spend anyway,whether the spending is financed via borrowing or taxes.
A
- That’s because it ends up in the taxpayers’ lap either way. Someone’s got to pay interest onthe borrowing. The only answer is cutting the outgo to match the income.
Q
- It really is a dilemma. Cutting back could hurt a lot of people who depend on government programs.A- Always ask what Americans did before all the government programs and you’ll find familieshad a much larger role to play. The government is taking over the role that used to belong tofamilies and neighbors.
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