Well, I should finally have some more wedding pictures up online next weekend. My mom picked some pictures from the photographer last week, but she hasn't had time to mail them down to me. So, until I get those, I can't really show much else. Some of the pictures from the photographer are really good, so I'm excited to get them online.
Otherwise... I started to make a "2002-current" Chase Tracks Map like the annual maps I posted about a few days ago, but I realized that it would take quite a bit of time. I should have made the annual maps differently, which could have made it easier to make an "accumulated" map. Oh well.
You know, one of the least discussed aspects of the war in Iraq seems to involve the amount of money that we are spending on the war. Several years ago, I never gave much thought to the national budget deficit and debt. After learning more about it, however, I wonder why few others seem to care. In the end, even the federal government needs to pay for what it buys, just as you and I need to pay our credit card bills. Sure, it's nice to say "I want to keep more of the money that I make", while also demanding better public health care, newer roads, and more federally-supported services, but does one not see the problem? The federal debt has ballooned in the past 5 years, with nearly 30% of the current federal debt (which is about $8.5 TRILLION right now) coming from deficits since 2000. There is a law that limits the amount of money that the government can borrow, but Congress ends up raising the debt ceiling when necessary, which allows us to borrow more money. Oh course, it's important to realize that we're borrowing a significant amount of money from foreign governments. Is there not a national security risk when foreign governments (such as China) control a significant portion of the federal loans (estimated to be near 50% at this time)? Is it not ironic that, when the goverment continually reminds us that we are trying to become more self-sufficient, many fail to realize that foreign governments are controlling a very large portion of the federal government's spending? Note that we NEED their control at this time, since our country would collapse if they stopped lending money to us.
We're talking about a balance between spending and income. Spending has risen sharply with the Iraq war, with the war cost passing the $0.5 TRILLION mark recently. Meanwhile, permanent tax cuts have been popular political moves that helped the current administration stay in power during the last set of major elections. Sure, it may have helped jump-start the economy, but you'd be hardpressed to prove that it has resulted in more income for the federal government. Reviewing, we see that there has been ballooning spending and decreasing income. What would Visa (and their lawyers) say if I kept charging more while refusing to pay? Eventually, they'll stop allowing me to borrow. In the meantime, I'd pay massive interest charges, which is exactly what the federal government is doing now. Per the US Treasury Department, almost $400 BILLION is spent each year on the INTEREST on the national debt. Don't we have many better things for which we could spend that money? While the current administration heralded a "less-than-previously-estimated" annual deficit earlir this year, they failed to mention that even this deficit was nearly unheard of before 2000. Sure, it's slightly better than they had estimated (note that the latest revision to the "estimate" came not too much before the official deficit was released... apparently, they have poor estimates, or, more likely, they intentionally overinflated the deficit estimate so they could "beat" it), but it's still astronomically massive. Sure, some folks will say "Yeah, but nobody has had to deal with an event on the scale of September 11th before, either". That's true, much of the money now is going to improved security (TSA, etc), but that doesn't mean we don't have to pay for it. If we want improved security, we MUST pay for it. The employees of the TSA are not working for free, neither are the soldiers in Iraq, and multi-million dollar aircraft aren't donated for government use. If we want to "take home more of our paychecks" (i.e. lower income taxes), then we must be able to live with reduced/fewer government goods and services. If we spend a massive amount of money to secure the country, and "spread" Democracy to other countries, we simply cannot afford to permanently enact massive tax cuts that reduce government income. Doing so results in exactly what we have seen in the past several years. Again, the tax cuts probably did kickstart the economy, but they still cost the government billions upon billions of dollars.
The following is taken from an article in a local newspaper, written by two Fellows of the Brookings Institute (HERE):
Making the tax cuts permanent would generate large, backloaded revenue losses over the next 10 years. Combined with a minimal but necessary fix to the government's Alternative Minimum Tax, making the tax cuts permanent would reduce federal revenues by almost $1.8 trillion over 10 years — and that's in addition to the $1.7 trillion of revenue losses already locked into law. By 2014, the annual revenue loss would amount to $400 billion, or 2 percent of gross domestic product — almost the size of this year's federal budget deficit.
· Paying for the tax cuts would require monumental reductions in spending or increases in other taxes. To offset the revenue losses in 2014 would require, for example, a 48 percent reduction in Social Security benefits, a 57 percent cut in Medicare benefits, or a 117 percent increase in corporate taxes.
· Over the long run, making the tax cuts permanent would cost as much as repairing the shortfalls in the Social Security and Medicare Hospital Insurance trust funds. Thus, to the extent that Social Security and Medicare are considered major long-term fiscal problems, making the tax cuts permanent should be seen as creating a fiscal problem of equivalent magnitude.
This problem is not going to get any better, unfortunately. Nobody will get elected on a platform of raising taxes, and anyone who tries to contain spending will be eaten for lunch during the next election cycle ("Senator ABC doesn't value the safety of our roads... Why would you like him put your precious family at risk?"). A war that has no end in sight doesn't help matters much either.
So, what should we do? I don't know. The best way to start is by voting for those who will have the backbone to actually deal with this problem. Anyone under 35 years old will have to face the dire consequences of years of gargantuan deficits in another decade or two, so it's in everyone's interest to deal with this problem now. We WILL need to repay the debt some day, and the most likely form of repayment will be fueled by greatly-raised taxes. Do we want our children tomorrow to bear the financial consequences of our actions today? It seems that much of the American public are so short-sighted that they cannot think of our financial healthy 20-30 years down the road. Or, the political landscape and the way by which we judge political candidates creates a situation akin to political suicide should any candidate run on a platform that would act to fix this problem.
1 Comments:
Great observations on the phenomenal debt created by runaway spending and tax cuts. The policies of this White House since 2000 represent a "raid" on the US Treasury by the wealthy, particularly those who might have failed to sell their stock holdings before the internet bubble burst. They wanted a personal payoff for the economic boom of the late 90's but weren't shrewd enough to achieve it on their own. So they sent their hired guns to the White House to secure it for them.
The GOP is selling the United States to foreign banks, no doubt about it. The Democrats aren't exactly crying foul about it either. Look at our balance sheet. Eventually, when liabilites outweigh assets, and when our largest corporations are run from foreign cities, we will be a wholly-owned subsidiary of China, Japan, and England, our primary underwriters. I can imagine a US right-wing movement to then "nationalize" everything (meaning steal it back as Latin American countries do once in a while), at which point the foreign purchases of US debt would cease (but those massive interest payments would not). We would wake one morning to a pay-as-you-go situation, a massive shock to our economic system. Inflation would explode. The stock market would deflate back to traditinal valuation norms (the market is still significantly overvalued by traditional metrics, P/E ratios, etc). The majority of US personal wealth would evaporate as 401ks and Fidelity accounts shrunk. The choices we would be forced to make, such as entitlements versus security, would push the nation to the brink of revolution.
Ironically, our new foreign bosses, with such a financial stake in US domestic stability might save us by purchasing politicians and charging them with holding the status quo. Of course, they won't have the same historical, emotional, or economic attachment to arcane ideas like the Bill of Rights. One could examine the relationship between the Bush family and the House of Saud and argue that process has already begun. Why does this most militarisic White House in history never rattle their sabers at China? Because the only trauma more violent to the US economy than an interruption of oil supplies would be the cessation of Chinese purchases of American debt.
The truth is that GOP *did* raise taxes--they raised them on our children and grandchildren. Worse, they sold the nation to our creditors, quite literally mortgaged the future. I'm afraid our generation will be the most reviled in US history, and we will have earned the distinciton unless we can reverse course. Right now I don't see a platform of massive spending cuts, tax hikes, and the down-paying of current debt as a great way to make pals on the campaign trail for either party.
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