I wrote a letter on U.S. national debt in December of 1991 to The All Alaska Weekly-a now defunct newspaper. In that letter I reviewed the historical development of public debt. Following are three paragraphs from that letter and a 2013 review of the financial circumstance of the public debt crisis and what is needed to resolve it.
December 13, 1991 All Alaska Weekly
National Debt
To the editor; The Republican Party at the national level, as holders of the Presidential post, have increased the national debt from $900 billion in 1980 to $3 trillion in 1992. For comparative purposes, the U.S. had virtually no debt of permanence until World War II.
It took from 1940 to 1980 just to reach $900 billion.
The gross national product is about $5 trillion. Reagan nearly doubled the gross national product of America, but also nearly tripled the national debt. That is deficit-financed growth. Another interesting fact is that since the Korean War, the U.S. national debt has never been reduced. If a politician says he will get rid of the debt, it would be an historical anomaly to do it.
2013-What is Needed to Pay off $17 Trillion of U.S. Public Debt
The federal budget should be brought into balance directly with cuts without raising taxes. There is plenty of room for those cuts using creative efficiency increases including the Department of Defense so services may remain at preset levels. Then federal taxation should be raised enough to bring in a $500 billon surplus directly applied to paying down principle on the federal debt of $17 trillion. That is, $500 million dollars should be taken from the U.S. federal budget and given to pay down the principle on the public debt. Taxation should be increased enough on the middle class and rich to bring in $500 million dollars annually so the federal budget can remain the same after the initial, one-time balancing budget cuts and reformulations.
The U.S. economic health is a different item than the federal debt and budget of the U.S. Government. The state of the economy is not fundamentally reformable by either tax policy or monetary policy. Instead the U.S. economy is a result of empirical economic factors multi-nationally and the demographics of global labor, supply, demand and allocation of capital.
With the post cold war global economic changes bringing Chinese investment to the Panama Canal and Mexico, illegal alien migration to the U.S.A., foreign investments in China as minority shareholders and internationalization of U.S. public debt there is less direct relationship between American capitalists and American workers than formerly. When the economy is down in the U.S.A. investors may take profits abroad. As 50 million Americans are on food stamps and more than 12 million Americans are unemployed Wall Street has recovered generally and investors have taken record profits. The middle class too has increasingly taken the side of the haves versus American have-nots while wealth has become concentrated. One percent of Americans own about 50% of the wealth of the nation.
Federal economic remedies would include incentives for hiring those longest out of work first, reduction of taxes for building small, energy efficient homes and incentives for hiring workers over age 55 that do not draw social security. Transformation of the U.S.A. to a full-employment, public debt free nation with an effective, comprehensive public welfare safety net concurrent with a robust ecologically rational economic recovery would require intelligent political leadership and the will to act. I suppose it is the political equivalence of the pay 'Waiting for Godot'.
No comments:
Post a Comment