With the federal debt at over $15 trillion and climbing by more than $1 trillion per year, the outlook for the United States is grim. Only fools and ostriches can be unconcerned. The gang warfare being fought in Congress by the ideologically inbred does not portend any positive action to address the problem and prevent an economic catastrophe unlike any America has ever suffered.
Eventually, there will not be enough money in the world for the United States to borrow in order to prop up its flimsy financial fabrication. Printing more money only delays, but does not avoid impending disaster. Nor is it likely that we can grow our way out of debt. For the United States to reduce its debt to a safe level of 60 percent of GDP would require an annual growth rate of 8.9 percent for 10 years running. That is a China-like growth rate that is improbable for a mature economy like ours.
Money is a fascinating concept, a commercial convenience that has currency only as long as it is perceived to have value in the market. Without money, folks resort to barter and trade. Money is whatever the vast majority of people agree it is. Historically, throughout most of the world, it was gold. For the past four decades the Federal Reserve Note, backed by nothing more than a promise that the United States would remain productive and financially prudent, has been the world’s currency — the new gold.
Whatever money is, the United States is running out of it. If the U.S. dollar is to remain a valid currency, America must make good on its supporting promise. The federal debt must be reduced to an amount that can always be retired in a reasonable time and not continue as a growing, teetering monument to greed and stupidity.
Greed and stupidity are what got us into this mess. While expanding entitlement programs and profligate defense spending are the largest contributors to the debt, government inefficiency, corruption and overreach significantly contribute to the excess spending and subsequent borrowing.
Every time I hear some politician or pundit dismiss a proposed specific expense cut or a specific tax increase as being insufficient, I wonder if they are incapable of simple math. Pennies make dollars. Add it all up and we begin to make progress toward financial sobriety.
How stupid is it to justify continuation of any expenditure simply because it is a small percentage of the overall problem? How greedy is it to continue any subsidy, tax break or program simply because certain special interests are making money by keeping it going?
For example, the futile war on drugs is both stupid and greedy. It’s a costly federal policy that only benefits some selfish folks in law enforcement while it punishes victimless personal choice, fills prisons and wreaks savage violence both in the United States and Latin America. The federal government alone can save $23 billion per year by ending the insane war on drugs, and pick up another $30 billion per year in revenue by taxing the U.S. share of the estimated $400 billion global illegal drug trade.
If we confiscated the wealth of criminally greedy corporations, banks and plutocrats as we do with the folks who use or sell some arbitrarily prohibited drug, we would be closer to paying off the national debt as well as punishing real criminals.
How many other federal programs, like the war on drugs, produce little or negative results but continue to be funded year after year because entrenched bureaucrats or pandering politicians benefit from them?
The federal government has 15 executive departments and myriad independent agencies employing 2.7 million highly compensated employees who micromanage every nook and cranny of American life. Do we really need federal agencies to study the mating habits of yaks or to bless some cancer drug before a willing, dying patient is allowed to take it?
Not only does this suffocating federal intrusion prevent balanced budgets and manageable debt, it prevents us from being a truly free people.
There are some essential services that make sense for the federal government to perform, such as justice, defense and disease control. As a nation, we must decide what these are and what their limits are. We simply do not have the money to continue with the greed and stupidity of fighting unnecessary wars, policing the world, spending 25 percent of health-care costs on the last year of life, paying farmers not to grow crops, or hovering over teachers with No Child Left Behind mandates.
As Dirty Harry Callahan might say, “a government has got to know its limits.”