A word on the national debt.

First, let us define national debt. This is necessary so that we may evaluate it as something that may or may not be essential to life as we are accustomed, and if it is, then let us suggest alternative targets.
In order to examine the national debt we have to first determine how it comes into being, and the answer very simply is: when the Federal Government makes expenditures which total more than its revenues, the result is a budget deficit. Over time, the sum of each year’s deficit spending minus any payments is calculated as a whole and called the national debt.
In order to still meet its spending goals, the government has to borrow money, which is achieved by the sale of US securities (savings bonds, T-bills, and such). Most of these securities (i.e. loans) are similar to the types of loans an individual would receive from a bank to finance a house or an education, for example.
Therefore, what we are talking about here is a promise to repay a certain amount of money at a set length of time and at an agreed upon rate of interest, which may be fixed, or may vary according to the terms of the loan.
Why does a bank loan an individual money to buy a house? There are at least two major reasons to begin with, number one being the bank has researched the individual’s credit history and income along with other factors to determine that it can afford to loan the money to that person, since it feels reasonably sure that the loan will be paid back within a set period of time plus interest. This is one of the ways banks make money. The second reason a bank will make a loan to an individual for a home is to help maintain stability in society. The bank is investing in that family, so to speak, with the return being good, law-abiding children who will hopefully turn into future bank customers; perhaps even bank employees.
One can see the parallel in government loans to college students to help pay for their education, because in essence the government is making an investment in students, who in turn will become part of the workforce, and who will not only eventually pay back their student loans (with interest) but will also continue to work for salaries from which the government may draw revenues in the form of taxes.
This is the general way that the American economy has run since just after WWII and the end of the Great Depression. Before that, the Government had generally played a small role in regulating the economy and had balanced operating budgets most of the time with very little debt comparatively.
The two big issues around deficit spending and the cumulative national debt are who is funding the deficit, that is—who is loaning the US government the money to operate? Furthermore, on what is that money being spent?
This becomes an emotional issue, because the people of the United States historically have been very hostile at the idea of raising taxes to fund the government’s operations, therefore the government has had to sell bonds, most of which are not sold to Americans since bonds have a relatively low rate of return, and they take a long time to mature.
However, they are considered to be very safe investments—backed by the full Authority and Confidence of the American government, so large foreign banks love the bond market, so much so, that from some points of view, much of the American government is owned by foreign entities.
Americans, regardless of our self-proclaimed “All Men Are Equal...etc,” tend to be very xenophobic, and though I’d reckon the vast majority of the populace is unaware of how much of this nation is owned by foreigners, there are enough people within the government who do know, and they are generally displeased with the fact.
Moreover, the second, and probably more important issue than where the money is coming from, is that very few Americans agree on where it should go to.
In 2002, the government spent $2.05 trillion, which is four times as much as it did in 1960 with about 24% being spent on national defense. 64% was spent on human resources including health, welfare, veteran’s benefits, and education, with the most money being shuffled into the two largest programs, Social Security and Medicare. Physical resources including, transportation, the Interstate Highways system, energy, and the Environment accounted for 6% of expenditures. While only 4% went to agriculture, National Parks, science and technology, and the courts with a paltry 1% being spent on foreign affairs (most of that in the form of aid to Israel) and the remaining 9% or so earmarked solely for the interest on the debt.
Remarkably, despite achieving the highest Gross Domestic Product of $11.7 trillion, of the top 17 industrialized nations, the United States ranks lowest in every category indicating quality of life such as life expectancy, literacy, access to health care and education. We are highest in unwed teen pregnancies, infant mortality rate, illicit drug use, consumption of over the counter and prescription pharmaceuticals, and have the highest percentage of our population in prison at any given time (which is both linked directly to the illicit drug trade and an appallingly high rate of recidivism.) The US is also the number one polluter of toxic wastes from depleted uranium shells to greenhouse gasses to heavy metals in the aquifers, and we are the world’s number one arms dealer.
Perhaps most distressing, despite the grotesque, ostentatious displays of gratuitous wealth by the top ten percent of the population, nearly 30 percent of the population can be classified as “the working poor” while a further 14% live at or below the poverty line, and most of these are children and the elderly.
Therefore, I am not especially concerned about paying off the national debt in and of itself, because a.) I don’t mind foreigners investing in our country—I take it as a compliment that they feel we are a safe investment, and b.) I am not especially happy with how that money is spent.
I would much rather recall all our troops and train them to build light-rails and efficient mass transportation systems and hospitals than waste another dollar on killing people who wouldn’t hate us if we stopped killing them.
I would much rather we sign the Kyoto treaty and commit ourselves to reducing pollution and developing clean, renewable sources of energy, than opening up the Arctic wildlife refuge just to keep the oil barons fatter and richer beyond conception.
I’d much rather rebuild and revitalize our inner cities into centers of art, architecture, learning, music, and medicine than waste another dime on a so-called drug war, which wouldn’t exist but for the slimy politicians and CIA operatives who seeded the fields of Colombia with cocaine and the mountains of Afghanistan with opium so that they could illegally fund their own death squads and terrorists to keep the masses docile and afraid.
Those are all lofty goals, probably out of reach of any one person, or any one class to shoot for with our little bake sale, but maybe if we shot for something within our reach—like say, planting a seedling tree for every cupcake we sell, or using the money to fund a trip to Sacramento to lobby our congressmen and women about environmental issues, or to recall Proposition 13 which sliced California’s educational budget to bits back in 1978 just so a few selfish people could get a tax break on their homes.
There are any number of issues to get mad at, but true political efficacy requires realistic goals, commitment, and patient baby-steps, and I suspect that our needle prick at the National Debt will be ineffectual and soon forgotten.