Tag Archives: federal debt

America Please Don’t Shoot the Budget Messenger….

Many years ago, three other gentlemen and myself met weekly at a modest diner. Our tastes were all similarly modest so we agreed to split the bill three ways. After a few months, a fifth person asked to join our lunch group. He had a much more aggressive appetite. Although he spent about twice that of the rest of us, he felt aggressively entitled to split the bill equally as well.

Without verbalizing their unease, others reacted by slowly increasing their lunch choices to balance their perceived slight. Since my appetite had not changed, the cost of splitting the bill soon stretched beyond my modest budget, and I politely left this burgeoning group. Soon after, a few others understood the budget bulge and the burgeoning bunch’s budget collapsed.

While all Americans are taught a simple understanding of home budgets and how they must balance or bust, somehow over the years, America was inculcated through a cognitive disconnect regarding politics’ Wizard of Oz and his magical black box of budget mayhem. Pull up any American article from a decade ago or even two, and you will see how the messages regarding our economy were the pied piper fluting us down the path to ruin.

In the early eighties, debates centered on retirement accounts and how they were a better solution than planned benefit retirement programs. Our retirement investments shifted into the stock market and were funneled into direct foreign investments. As resulting stock market ratios increased beyond belief, our investment advisors told us of the new market dynamics in which these ratios made sense.

As our manufacturing base left America, free market advocates explained how cheap foreign goods more than made up for lost jobs and how the new American economy would be information and service based. Of course, as our schools continued to drop in international rankings and our students failed to graduate from high school in ever greater percentages, proponents of our learned universities pressed upon us how America was the land of innovation and that no other country could compete with our exceptionalism, even as our grade school teachers explained how every student was exceptional and why competition was therefore inappropriate.

Over the last two decades, as our medical costs began to spike while our mortality and morbidity rates crept lower, we heard correctly but misleadingly that America has some of the world’s finest medical institutions in which the world’s elite come to for leading edge services. All the while, our insurance rates leaped higher at double digit rates, even while denying these leading edge services to the masses, until we spent double per capita of any other industrial country in the world. Yet, our medical costs mirrored our national budget in that hidden pricing passed through insurance without attempting to connect these increases to the consumers understanding of growing insurance rates.

Our military costs accelerated higher over the last decades until our defense budget, including defense budgets items hidden in other departments, now was 200 percent of all other countries’ military budgets combined! Yet, with 300 bases spread throughout our 50 states and with major military manufacturing and research facilities supporting local and state government budgets and creating opportunities for jobs in most, our communities did not connect the business of defense with the massive deficits it caused to America’s budget.

During our awesome run-up of housing and commercial real estate values when traditional rent rates to real estate price models failed to come close to making any economic sense, everyone from agents to mortgage brokers showed us how historical models no longer were relevant because they failed to consider the double digit rise in asset values that would continue ad infinitum.

When inflation seemed too high, we were told why core inflation should not include two of our most basic needs, food and energy. When massive amounts of dollars were flying off our printing presses to cover deficits, we were told why historical money aggregate numbers would no longer be tracked as these exploding values seemed to be discognitive by their very existence. When our trade deficits began to grow, we were told trade deficits were a good thing because they reflected an economy ripe with investment opportunities and flush with consumer confidence.

Our most esteemed and beloved President proposed trickledown economics stating that greater earnings to the rich would be invested in America for net benefit even as record amounts of investments were being transferred to China. Our most learned economists advocated that lower tax rates would bring in higher tax revenues. And when our investment banks got caught with their pants down, our central bank and treasury forcefully told the American public that the only thing that could be done to save America and the world was to print two trillion dollars and give it to the banks so they could pull their pants up.

Now, even as we are told, and with good reason, that our economy, and that of the world as we know it, may melt down if we do not raise the debt ceiling and reduce our deficits, most Americans still do not understand that between our military spending and federal healthcare spending, the two combine to consume every American federal tax dollar collected, and that the rest of our entire federal budget is borrowed. Yet even with such a massive debt and deficit facing us, we have been conditioned to caution any would be town crier against speaking frankly.

Any effort thus far of individual public figures to stand up and tell the American public the truth about the calamity of our historic political failure has been met with the severest of gamesmanship. Our public debate continues to look more like musical chairs. Unfortunately, each truth teller is left standing without a chair to sit in when the current news cycle is up. If only we could pull a Roman Senator from history and place him in the halls of Congress to tell the story of his empire’s ruin, perhaps our leadership would listen. Yet, they say that even if Jesus himself were to appear hovering above the earth in the second coming, most of us would not listen to his message. Instead he might find his musical chair taken away during the second coming’s news cycle.

Leave a comment

Filed under American Governance, American Politics, Federal Budget