How Can We Save Our Debt-Swamped Government?

The United States is $10.2 trillion in debt. Like countless Americans, our government has spent beyond its means and needs help getting back on its feet. We recently received a panicked email from White House Budget Director Jim Nussle…

Help!!!!

I can’t stop spending! I’ve tried the whole “control your spending” thing, but it just isn’t working. I’m $10 trillion in debt and I only make $2.5 trillion per year, and now this Bernanke jerk put me on the hook another $1.5 trillion! My boss is breathing down my neck and China is threatening to repossess all my stuff.

Please, what can I do?

Calm down, Jim. You too can escape from debt by following a few basic budgeting principles. Let’s take at look the government’s budget and see if can’t benefit from some personal finance wisdom.

Take the scale down a couple thousand notches and the United States Government is like a divorced father working to make ends meet. The poor guy makes about $30,000 per year and grapples with a seemingly inescapable debt of $90,000. Instead of paying down the debt’s principle, he spends slightly beyond his means, about $32,880 each year, ensuring that that his coffers won’t overflow anytime soon.

Each year, he sits down and writes out a detailed five-year budget that always puts him in the black towards the end. He promises to start paying down the debt then, but in practice, the extra cash never materializes. It’s not that he doesn’t have good intentions. His spending is just too unwieldy.

He has two types of expenditures: personal and court mandated. His personal expenses are the basics. He pays for rent and food, and the occasional beer at the neighborhood bar. Nothing too extravagant. It’s becoming tougher to justify those little luxuries as his other expenses have grown. By order of the court, he must pay his ex-wife significant alimony, plus child-support for their growing kid. He could save money by eating out less or watching the game from home instead of heading to the bar for a pint, but those unpopular choices wouldn’t make anybody happy.

These are the pretty much the choices facing the U.S. government, but on a drastically larger scale.

How Much Do We Owe?

The U.S. debt is huge. The interest payments alone cost more than $400 billion. China is our Master Card and Japan is our Visa. As a society, we owe them $2 trillion, plus interest. And every single day, we borrow another $1.5 billion.

What’s All This I Hear About A Deficit? Is That The Debt?

No. The deficit is our yearly contribution to the debt. When politicians talk about slashing the deficit, they mean that *this year* we will still add to the national debt, but maybe not as much as we thought. Presidents habitually propose “balanced” budgets that slash deficits year after year, ending with a balanced budget after five years. Ignoring the fact that Presidential terms are four years, those proposals mean that the government will continue to add to the debt for every year except the last, when we will contribute nothing to debt, but won’t do anything to reduce it either.

When the government spends less than it receives, we have a surplus. This is rare. Surpluses come with the same choices as holiday bonuses. You can blow them on iPods (or F-22 Raptors,) or pay off your student loans and credit card bills (or Social Security.)

Why Is The Planet’s Wealthiest Nation In Debt?

Just like our hypothetical divorced father, the U.S. has two types of expenses: discretionary and mandatory. Discretionary spending accounts for one third of our budget and funds all the those nice little things that we want, but aren’t required to fund. This encompasses most agencies you know about, like the Pentagon and the Departments of Agriculture, Education, State, Labor, Justice, Transportation, Commerce, and Homeland Security. All of it is nice, but if Congress wanted, it could quickly swing the legislative mace and kill off the FBI and the Navy.

Discretionary spending is also the source of those pork barrel projects that get Senator McCain in such a huff. Technically, pork barrel projects benefit the residents of one Congressional district—think of that spiffy new park down the street—rather than further any national aim. In a budget of nearly $3 trillion, they cost around $18 billion.

The vast majority of the federal budget is eaten up by the mandatory spending that funds our social safety net. The big entitlements are Social Security, Medicare, and Medicaid. The cost of entitlements is driven by the number of eligible citizens, rather than the annual Congressional appropriations process. To our divorced father, they are the court-ordered child support payments.

Congress has the ability to tweak entitlement program eligibility, or scrap them altogether, but politicians don’t like futzing with our entitlements because it’s one of the easiest ways to get fired.

Don’t Mention The War!

You may have noticed, we’re at war. The wars in Iraq and Afghanistan add to our national debt, but not to our deficit. How? Emergency spending. Congress doesn’t have a rainy day fund like most responsible families. When the United States’ car breaks or we have an unexpected health scare, Congress waives its few existing budget rules and appropriates emergency funds, adding to the debt like any normal expense. For those keeping track, the wars have added almost half a trillion dollars to the debt.

Even in peacetime the Pentagon guzzles nearly half a trillion dollars annually for its operating budget. The defense budget is so large that it was one of the only points of reference for the recent $700 billion bailout.

Ok, Debt Is Bad. How Do We Reduce It?

If our hypothetical divorced father can reduce his debt, so can the government.

Keep A Budget: Well at least this one is covered. We have a budget and we know exactly where our money goes. See, here’s the President posing with his newfangled “E-Budget.” To make your own slightly less fangled version, read our post on How To Build Your Own Budget .

Acknowledge The Problem: Hmm, well, we kinda have this one covered. Maybe you remember that Perot fellow, the one with the ears and the oil who loved talking about our debt? He got it. Some of our politicians get it, but Oh! New Program! WANT!

-sigh-

Stop Digging: This means balanced budgets. The government won’t ever pay off its massive debt unless it stops sending more than it takes in year after year. Balanced budgets are only the first step. We really need more money.

Make Small Cutbacks: Um, yeah. Whole think tanks devote their time to finding “small cutbacks” that might save a little cash. If the government really was a divorced father, we’d point him to our post: 5 Expenses You Can’t Afford If You Have Credit Card Debt.

Start An Emergency Fund: Lockbox, anyone? This was one of the original ideas behind Social Security and Medicare: start a separate fund with a separate funding stream, and keep the big bad mess away from our annual operating budget. It didn’t take Congress long, those naughty little rascals, to figure out that the big box labeled “COOKIES – DO NOT TOUCH” was filled with yummy, yummy cookies, on which they’ve been feasting ever since. Now the trust funds, as the President likes to point out, are filled with IOUs. Whoops! You, however, are more disciplined than Congress, and have no excuse for failing to fund a rainy day fund.

Snowball: You have an edge over the government in that you can start a debt snowball, paying off your smallest balances first and then applying your newfound cash to payoff the larger balances. The government doesn’t have “small” and “large” balances. They simply owe tons and tons of money. Revel in your superiority by reading our post: Use Snowball Method Spreadsheet To Pay Off Debts

Make More Money: This means raising taxes, the government’s nearly exclusive source of income. Everyone, even people who want more government programs, hates paying taxes. There’s nothing pleasant about it. But it’s the only way the government can raise cash. We need to pay for all those nifty services like the Do Not Call List and the Pentagon.

Spend Less: This means cutting services, like that Do Not Call List and Pentagon thing we like so much. Rarely can we agree on what to fund, let alone what to cut. In a budget of $3 trillion, canceling the government’s cable service doesn’t amount to much. The big dollar savings come from staunching the future cost of entitlements or scaling back defense spending, but good luck getting the needed votes in Congress.

But Isn’t Some Debt Ok?

Some debt is the natural byproduct of a healthy society that reinvests in its future. Just as student loans are investments to boost future earnings potential, the government funds projects that can improve society and the economy. We can all agree that the interstate system is rather spiffy.

Economists bicker over how much debt relative to income is healthy for the economy, but most everyone accepts that a reasonable amount of debt—however much that may be—is alright, much in the same way that carrying a mortgage isn’t fundamentally bad.

Public policy is the constant, painfully entertaining struggle to provide the right services at the right tax levels. When you realize that cutting spending means fewer police officers or raising the retirement age, and that making more money means raising your taxes, you begin to understand why we have a $10 trillion debt.

What Can You Do To Reduce The Debt?

The most important thing you can do is to keep paying your taxes. If you are feeling especially charitable, you can make a donation directly to the treasury. Make your check payable to the Bureau of the Public Debt, and in the memo section, write: “Gift to reduce the Debt Held by the Public.” Mail your check to:

Attn: Dept G
Bureau Of the Public Debt
P. O. Box 2188
Parkersburg, WV 26106-2188

Budget of the United States Government [Government Printing Office]
(Photo: Matt McGee)

Comments

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  1. doctor_cos wants you to remain calm says:

    De-criminalize marijuana and tax it.

    Done.

    • @doctor_cos:
      Agreed!

      However, Marijuana has already been decriminalized in many localities (New York, for example) and even legalized (California) but it still remains illegal on a federal level.

      If the Federal goverment could legalize marijuana, and let the states decide whether to allow (and tax) marijuana, we’d see a nice increase in tax revenue.

      • Brontide says:

        @Dooley: Yeah, I think he was referring to de-criminalizing cultivation and sale, not just possession for personal use.

        It immediate harm is less than alcohol, it’s less addictive than tobacco, and it’s easy to grow. It’s a federal policy that is laughable on it’s face.

        • doctor_cos wants you to remain calm says:

          @snowmoon: And it’s a federal policy that wastes my tax money via enforcement and housing the dangerous “criminals” who are caught. So there’s more money to help out.

          See, this just gets better and better.

        • papahoth says:

          @snowmoon: Less addictive than tobacco? Yea, like coffee is less addictive than heroin. There is no comparison.

          • jenniferrose76 says:

            @papahoth: @doctor_cos: i concur wholeheartedly. what astonishes me is that in my state the only places to buy hard alcohol is in state-run liquor stores…several of which are located on the side of the highway. yet marijuana, which is proven again and again to be less detrimental to your health than alcohol is against the law.
            we pay quite a bit of money to put someone in jail for having minute amounts of pot on them, when we could, as a government, tax the hell out of it and make money instead.
            our government is so puritanical and short-sighted that we continually shoot ourselves in the proverbial foot-no wonder it’s the laughingstock in so many areas.

          • Luckie says:

            @papahoth: Well, to be fair, even though marijuana is not physically addictive, it is often psychologically addictive. But anything can be psychologically addictive, such as my beloved Carmex that I can’t do one single day without ever and if I am parted from it I will freak right the heck on out.

            But no one’s trying to criminalize Carmex just because I can’t make up my mind to do without it.

      • nysports says:

        @Dooley: It’s a little misleading to say that marijuana has been decriminalized in New York. Certain small amounts of marijuana used in private (emphasis added) can result in nothing more than, essentially, a ticket, but these rules only apply to small amounts of the stuff used privately. Not all possession of marijuana is not a crime.

        Also, as for the article, there are more advantages to the debt than the author makes clear. Well…at least it should be said that the deficit is just a tool that the government can use to influence economic events, just like the tax rate. The notion that “debt” is bad, just because it is debt is unfair. Debt has to be looked at as a tool of influence and nothing more.

    • easy2panic says:

      @doctor_cos: Just as long as it they aren’t under the influence of it in public, I don’t mind them doing it in their own homes, but I don’t want them to do something out in public that endangers others.

      • ganjagadget says:

        @easy2panic: I have been stoned for about 15 years. You don’t need to worry about being in danger, actually you are safer if you are surrounded by people that are stoned because we are usually very relaxed, thoughtful and ready to assist in times of need =:-’>

      • Luckie says:

        @easy2panic: Oh, like drinking alcohol in bars.

        (not 420 friendly, just amused by the double standards between alcohol, tobacco, and pot)

    • @doctor_cos: Let’s expand gambling too. That fixes everything!

      /except that all the revenues are swallowed up by the societal ills it causes
      //and it’s a massive tax on the poor
      ///oh wait, it’s “just a game”.

      • Illusio26 says:

        @InfiniTrent:
        I don’t buy that tax on the poor crap. A fool and his money are lucky to get together in the first place. It’s a tax on the ignorant, not the poor.

    • ganjagadget says:

      @doctor_cos: Great first post.

    • LibertyReign says:

      @doctor_cos:

      I think the point would be to decriminalize just about everything that has to do with personal choice. This would not only expand the market exponentially but it would help to alleviate the burden on our personal freedoms.

    • @doctor_cos: Oh if only!

      Anyone expressing an opinion ought to read this book if you haven’t already:

      “Ain’t Nobody’s Business if You Do –
      The Absurdity of Consensual Crimes in Our Free Country”

      [www.mcwilliams.com]
      ^^^^^^^^^^^ the whole book is right there online for free…
      [www.mcwilliams.com]
      ^^^^^^^^^^^ the only “necessary” part

      • @alphafemale:
        THIS BOOK IS BASED on a single idea: You should be allowed to do whatever you want with your own person and property, as long as you don’t physically harm the person or property of a nonconsenting other.

        Simple. Seemingly guaranteed to us by that remarkable document known as United States Constitution and its even more remarkable Bill of Rights. And yet, it’s not the way things are.

        Roughly half of the arrests and court cases in the United States each year involve consensual crimes-actions that are against the law, but directly harm no one’s person or property except, possibly, the “criminal’s.”

        More than 750,000 people are in jail right now because of something they did, something that did not physically harm the person or property of another. In addition, more than 3,000,000 people are on parole or probation for consensual crimes. Further, more than 4,000,000 people are arrested each year for doing something that hurts no one but, potentially, themselves.

        The injustice doesn’t end there, of course. Throwing people in jail is the extreme. If you can throw people in jail for something, you can fire them for the same reason. You can evict them from their apartments. You can deny them credit. You can expel them from schools. You can strip away their civil rights, confiscate their property, and destroy their lives-just because they’re different.

        At what point does behavior become so unacceptable that we should tell our government to lock people up? The answer, as explored in this book: We lock people up only when they physically harm the person or property of a nonconsenting other.

        • doctor_cos wants you to remain calm says:

          @alphafemale: I have no problem with that whatsoever.
          You can do whatever you want so long as you do no harm to other people or their stuff.

          The problem is this answer is too simple for most people, who need to “help” others to “not hurt themselves.”
          Sad.

        • godlyfrog says:

          @alphafemale: I support the concept in theory, but the execution worries me. The same theory allows someone to drive drunk until he kills someone, or shoot bullets into the air until someone dies. It relies heavily on the responsibility of others to restrain themselves, when all you have to do is read a newspaper to realize that most people can’t.

          The divorce rate, the amount of illegitimate children, the amount of people who spend themselves well past their limit, the ones in bankruptcy, the amount of people in lawsuits where someone “done them wrong”, the ones who didn’t know their finances enough to know not to buy that house; all of these things point to the idea that more and more people in our society today believe they should make rash decisions and not expect to suffer the consequences for them. If we seriously want to legalize drugs, we would have to stiffen the laws governing the punishment for crimes committed while under the influence of those drugs. We would need to send a message that as a society, everyone needs to take responsibility for themselves, and we will strictly punish you if you do not.

          • garbagehead says:

            @godlyfrog: There’s an easy solution. People who take heroin or cocain would have to pay out the ass for health care making it.
            Of course this might produce tons of homeless crack fiends who just got evicted from their house they couldn’t afford.

    • Robobot says:

      @doctor_cos: I’m so glad someone brought this up. Living in a college town- and home to the university ranked as the High Times #1 pot school at one point- I’m pretty confident in my knowledge of the pot economy. People are willing to spend a lot of money on pot, especially good stuff from reliable sources. Pot smokers are actually pretty savvy consumers, taking quality over quantity into consideration and taking their business elsewhere if their source disappoints them.

      Every smoker I know, and I know a few, loves the idea of legalizing it and talks about it regularly. This includes the representatives from a national advocacy group I talked to. It’s not like I have talked to all the smokers in America or anything, but enough to get the feeling that legalization with heavy taxation would be welcome. You can debate the addictive properties and public health risks all you want, but economically pot could be very helpful.

      …And no, to any federal authorities reading, I don’t smoke pot.

    • East_Coast_Midwesterner says:

      @doctor_cos:

      I don’t smoke it personally, but could care less about the legality of it.

      I wonder what the cost would be for the new “revenuers” who now look for backwoods pot fields in lieu of stills full of sour mash.

      Wait…. if Nascar came out of the old illegal distilleries and rum running, then I am completely against legalizing marijuana. I cannot imagine the horror of a hipster drag racing circuit.

    • garbagehead says:

      @doctor_cos: Good call. I tend to spend a lot of money on things i Don’t need (candy, funny junk) when i smoke. ‘an added bonus’ to the economy.

  2. easy2panic says:

    Do you think anyone will actually make a donation?

    First, many people think that their contribution would be so insignificant. Also, people on a whole a more charitable when they get to chose where their money goes, not when it is already decided to them by the government.

    • sabrinad says:

      @easy2panic: Looks like people do, according to the web site. $2m this year so far.

      Looks like it’s tax-deductible too (for those who itemize). Plus that doesn’t include the intangibles, like bragging rights round the water cooler at work next time you want to tell someone to put his money where his mouth is.

  3. Brontide says:

    10.2 Trillion… BEFORE the bailout/”rescue” package.

    We need to stop deficit spending on non-infrastructure items. Just as a home and a car ( within reason ) can be a great investment, the government should be using the deficit to improve the US infrastructure and not for random pork and tax breaks.

    Looking at McCain and Obama, both are looking to defict spend to meet their goals. The scary thing is that at the end of the day Obama will deficit spend *less* than McCain. ( according to the congressional budget office studying their plans ).

    • LibertyReign says:

      @snowmoon:

      Why would any self-respecting globalist stop defecit spending? The money is worthless anyhow.

      • Brontide says:

        @LibertyReign: I didn’t say to stop deficit spending, be we need to restrict that which we blow debt on. There is always an opportunity cost and financing that are at issue.

        Government deficits don’t work like an individuals debt, that is true, but to ignore the opportunity cost of running a deficit that is approximately 100% of GPD is scary.

  4. We should put congress in a freezer and only take them out in emergencies.

    • Brontide says:

      @johnarlington: I hate it when any party has a majority of both houses and the executive branch. I like a deadlocked government much more.

      • reflection717 says:

        @snowmoon: I was JUST thinking that. The government never worked better than when it accomplished very little. The only things that happen when the government is balanced (party-wise) are bipartisan issues that everyone can get behind. Here’s hoping for that come January!

  5. 6a says:

    Zero based budgeting wouldn’t hurt, either.

  6. Triborough says:

    For some reason the phrase “We had to destroy the village in order to save it” comes to mind. The two morons running for president were involved in help creating the problem thanks to being in the Senate. No matter which one of the corrupt politicians wins, we all lose.

    • inspiron says:

      @Triborough:

      There are more than two options

      There are TEN people running for president and the average ignorant taxpayer only know of two of these people.

      for example Bob Barr is a man running in the libertarian party he believes in less goverment, lower taxes and greater individual freedom, I’d look into it.

      • nicemarmot617 says:

        @inspiron: And there’s another piece of ignorance: Bob Barr is a Republican running under another party’s flag. At this point the entire Libertarian party has been co-opted by delusional idiots and angry former Republicans.

        Many people would be libertarians if they had any basic understanding of political philosophy. Sadly, the Libertarian party does not really represent these beliefs and in my opinion even negatively affects the development of libertarian beliefs.

      • papahoth says:

        @inspiron: Bob Barr eats cheese made from human female milk.

      • reflection717 says:

        @inspiron: We know of the others but does anyone remember what happens when we vote for them? We get BUSHed! In general, those third party candidates sound great to one party or the other and split the vote just enough on a close election to send the wrong candidate into office (wrong meaning the one that is further from the ideas of the third party candidate)
        A vote for the third party in a very close race is like voting for the person you LEAST want to see in office.

        As far as Libertarians, I’d be one but I’m supporting the party closer to my ideals that has a chance of getting into office.

        Great site if you don’t know where you stand, by the way…
        [www.politicalcompass.org]
        Take the test and see what party you are, you might be surprised.

  7. EarlNowak says:

    Whoa! Bad example– The post office isn’t paid for by taxes!

    Except for Free Services offered to blind people (mandated by congress), the Postal Service is entirely self sufficient through postage revenue. That’s why postage rates are going up- the post office has one of the nation’s biggest vehicle fleets and the price of gas directly affects costs.

    Interestingly, the post office generally has a three year cost window between rate increases- increases are designed to permit a modest profit the first year, a break-even year, and then a modest loss year before raising rates (if necessary).

    • AuntieMaim says:

      @EarlNowak: I was just going to log in to make the same point. I think a correction is in order — the post office is not funded by taxes.

    • TVarmy says:

      @EarlNowak: So is it not-for-profit? The strategy with the stamps is interesting, and it seems to show an intention of breaking even, which is probably meant to be their entire strategy.

      If they were to be really badly managed and approach bankruptcy, would the government have a legal obligation to bail them out? I’d assume it’d happen either way, as the USPS is such a major institution and the politician who killed it by inaction would be unpopular.

      • EarlNowak says:

        @TVarmy:

        Well, the USPS isn’t a government owned corporation (like say, Amtrak), it’s a department of the executive branch of the united states government- like the Department of State or Department of the Interior. They’re immune from civil lawsuits and can do stuff like take land by eminent domain and make postal treaties with other countries.. I don’t think it can go bankrupt. If they need money, they’ll take a loan from the treasury and increase postage rates.

        It’s in Article 1 of the constitution- Congress has the power to establish Post Offices and Post Roads, and Congress has mandated that the Postal Service be self-sufficient and cost-neutral– and that the cost of a first class letter has to be the same whether it’s mailed from New York to Newark or from Wasilla to Waikiki.

    • EarlNowak says:

      @AuntieMaim: Well, they removed the Post Office from their examples, so I guess someone is actually reading comments. ;)

    • @EarlNowak:
      Another thing: the U.S. Post Office isn’t a governmental agency.

  8. ojzitro says:

    It’s going to take money, and precious time. Hell, throw in some patience too, WTF.

  9. Trai_Dep says:

    Kill “Star Wars”. SDI has never passed a true, non-cheating test, and even if it were able to, counter-measures can be cheaply brought online that would overwhelm the system.
    Whatever nuclear threat we face SDI won’t help.
    It’s corporate welfare of the most cynical kind: give us billions or you’re in favor of nuclear apocalypse.
    Sure, it’s only $30,000,000,000. But tens of billions here, and there, and you’re talking about some decent spare change.
    I’d bet there are a dozen more gold-plated Pentagon programs of similar cost with that could be similarly axed without impacting our national security.

    • TVarmy says:

      @Trai_Dep: The same could probably also be said of the Ospry, which has been in development for 25 years with 20 billion dollars, and has become a shadow of the proposed design, with much less firepower. What’s worse, it has cost 37 (IIRC) lives in the test runs.

      Of course, while the aircraft is dangerous and more limited than projected, I can see it serving some useful purpose at this point, so there isn’t much harm now that the research is done. Star Wars seems to have a bigger problem, in that it fights a threat ineffectively, and will cost tons to maintain even once the research and development is done. And the R&D may never be done, as newer missiles/nuclear bombers will be built to outsmart it, making this an expensive cat and mouse game, with a very fat, very slow cat.

  10. goodstuffmaynard says:

    But I thought that debt = money, so doesn’t it make sense that the world’s wealthiest nation also has the most debt?

    • panzerschreck1 says:

      @goodstuffmaynard: kind of. if we were investing the debt, then yes. but we’re spending it on war and entitlements, which makes it bad debt.

      the article differentiates between good national debt and bad, and then brings up the question of how much debt is acceptable in relation to our income.

      and then you could say that we’re mostly the wealthiest nation because of all that money we get from debt. we import far more value than we export, and we pay for a lot of that extra wealth with debt.

    • TVarmy says:

      @goodstuffmaynard: I’m guessing “wealth” is based on GDP. Are there any countries in the black? Surely there must be, otherwise, wouldn’t humanity be using more resources than it actually has? I get confused easily.

  11. Good article, guys. 10.2 Trillion sounds like an insane amount of money, until you realize that we bring in trillions a year that could be used to pay that debt. Great analogy with the “divorced father”.

  12. Yarrr says:

    2.5 Trillion, and that’s not enough? I was thinking about this on the way home today, oddly enough. That’s almost 5 million dollars a minute. 80,000 dollars a second. A freaking second and they’ve spent more than I make in a year! We’re so hosed.

    • TVarmy says:

      @Yarrr: For a more poignant number, consider that federally, $49.63 per taxpayer is spent per day. There are 138 million tax payers in the country. Kinda makes me glad that we have a sliding scale for taxes.

  13. GinnyIrene says:

    Keep A Budget: We may have a budget, but not an honest one. Frequently items are declared to be “off budget”: Future Social Seciruty costs, Iraq war spending, Katrina rebuilding boondoggles, and lots of other unplanned spending. If my furnace breaks, can I claim the cost of putting the new one is “off budget”? No. Neither should they.

    Acknowledge The Problem: We’re only half way there. Most politicians I’ve heard (with few exceptions such as Ron Paul) only “get” half of it. Republicans blame excess Democratic spending. Democrats blame Repblican tax cuts and adding spending programs without funding sources. Each is only half right – they need to also accept blame for their party.

    Stop Digging: Congress needs to fully acknowledge the problem and top telling ignorant voters they can get a free lunch. Voters need to understand that hearing “no” to adding health care benefits or establishing a new spending program isn’t “uncaring” or “heartless”.

    Start An Emergency Fund: Its covered – The US supposedly still owns many tons of gold in Ft. Knox (Notwithsanding Internet rumors that say it is empty….)

    Make More Money: Higher taxes = more money??? Perhaps not! Mathematically there exists some tax rate that will produce maximum tax income. Many economists say we are already there. Almost all agree we are very close to it. Once we reach that point, raising taxes rates much further will reduce the incentive for productive work and choke the free flow of capital, lowering the tax base and actually leading to LOWER overall tax collections.

  14. Hyman Decent says:

    Robert B. Reich (“a secretary of labor under President Bill Clinton [...] a professor at the University of California, Berkeley [and] the author of ‘Supercapitalism’”) argues in favor of some deficit spending in a recent Op-Ed piece in The New York Times.

  15. Islandkiwi says:

    It says in the article that “[t]he interest payments alone cost more than $400 billion.”

    So if we’re running at a 400 billion annual deficit does that technically mean we have a balanced budget? Or in order to have a balanced budget we would ned to slash our costs by 800 billion to account for that 400 billion…I don’t know, it’s a headache-inducing nightmare.

  16. Lars says:

    There is a huge problem with this argument. It assumes that money is a limited item, like any other commodity. Money is an act of law and it’s creation is used to facilitate thew workings of society. There is no logical reason the United States should have to borrow funds from anywhere to do what it needs. If the United States decides that war, infrastructure, education, etc. are worth pursuing, then it can create the funds necessary to proceed with these actions. The US Gov can then regulate the money supply by increasing or decreasing tax rates to control inflation.

    Allowing private interests to create money out of nothing is what got us into our current, and many other messes. The best way to get out of debt is to reform monetary policy. Please visit monetary.org for more information if you’re curious about these issues.

    • SinisterMatt says:

      @Lars:

      While in a sense money is a creation of the government (that’s why it’s called fiat money) and people’s trust in it, printing too much just to solve a national emergency can (and often does) lead to runaway inflation. Runaway inflation has been the fall of more than one government in the history of the world, and it seems to be what may happen to Zimbabwe– they had something like 18 million percent inflation a few months ago. Unless the U.S. wants the same fate, printing money whenever a problem arises doesn’t seem like a good idea, even if it were quickly re-regulated and decreased.

      Cheers!

      • alysbrangwin says:

        @SinisterMatt: It’s what crippled Germany after the Great War, and then they had the rise of a demagogue.

        • Lars says:

          @alysbrangwin: The point is to print money when it is needed to accomplish constructive goals. This is why I suggest investing in national infrastructure and the well being of our citizens. This is not inflationary action if the money is used productively.

          In regards to post-WWI Germany, crippling debt burden placed on them as part of their terms of surrender was a huge problem. Also, the Weimer government didn’t put much of their fiat money to work either, they just wildly printed money. That’s not what I’m suggesting at all. I suggest putting the money to work.

          I again suggest consulting monetary.org for workable solutions to more Wall St. bailouts.

  17. TPK says:

    ‘m vry sd t rd ths bslt nnsns. Thr mght b gd pnt r tw n ths rtcl, bt y flshd thm ll dwn th drn, lng wth yr rpttn whn y lbld th Dprtmnts f Dfns, Jstc, nd Hmlnd Scrty s “nc t hvs” bt lv Mdcr, Mdcd nd Scl Scrty s “mndtry spndng”.

    W lv n rl wrld, wth rl ppl wh wnt t kll s rl dd. t wn’t d grndm nd grndp mch gd t hv chck cmng whn th cntry hs bn vrrn by nms, bth frgn nd dmstc.

    Grw p. Rd Hstry bk.

    • @TPK: Yes, because there has never been a peaceful society in all of history and if we don’t load ourselves to the gills with bigger and better weaponry we can never survive and fear fear fear FUD FUD FUD are you scared enough yet hand over all your money!!!

      ‘S called a “sales pitch”, I believe, and it’s about as true as the rest of ‘em.

    • TPK says:

      @TPK: Well lesson learned… hasty posting will get you disemvoweled.

      I will try again, more carefully this time…

      I believe that labeling the Departments of Defense, Justice, and Homeland Security as “nice to haves” while viewing Medicare, Medicaid and Social Security as “mandatory spending” damages your credibility.

      The United States of America is not “entitled” to exist. We had to fight for it, and fight hard. There is a world full of people, both foreign and domestic, who pledge their very lives to the destruction of this great country. Without our self defense, grandma and grandpa’s monthly checks will not only be a distant memory, but also the last thing on their minds should these enemies have their way.

      To quote Santayana, “Those who do not learn from history are doomed to repeat it.”

  18. infected says:

    Too bad that no one listens to Ron Paul, he’s been saying the same thing for over 20 years.. Big Government is full of loss.

  19. JoyAsclepius says:

    Watch this interesting movie (about a 1/3 of the way it talks about the Federal Reserve Bank)

    http://video.google.com/videoplay?docid=-594683847743189197&hl=en

    Did you know it was a private company? Neither did I.

  20. lincolnparadox says:

    If the Iraq/Afghanistan wars were budgeted, our debt would be less than $9 trillion. If the bailout were budgeted, our debt would be under $8 trillion ($630 billion in US currency was released by the Fed before the bailout was even voted on). Outside of those debts, that still means that the Bush Administration is responsible for doubling the national debt since he took office.

    Clinton increased the debt by 50%.
    Reagan/Bush41 increased the debt by 400% (to be fair, most of that was Reagan). I guess taking that into consideration, Bush didn’t do such a bad job…

    Still, how did President Bush do this? His tax breaks and the deregulation of Wall Street. If Obama wins, all he has to do is roll back the Bush tax cuts and put a leash on Wall Street. With a Democrat-controlled Congress, it’s a done deal. It will take years to fix the problem, but with Obama’s tax cuts for the 95% of Americans making less than $250K, I don’t think the majority of citizens will be bitching.

    So, before you ask yourself if there is a difference between McCain and Obama. Look at the national debt graph for GOP vs. Dems.

    [www.bloomberg.com]

    • alysbrangwin says:

      @lincolnparadox: I read that Bush is the only President in history to start a war and cut taxes. That’s what pushed it over the edge. My generation is fucked.

    • sodden says:

      @lincolnparadox: Sorry Lincolnparadox, you’re mistaken. The debt was increased during Reagan’s terms because congress went crazy spending, even after they had made a deal with Reagan that they wouldn’t. Revenue for those years went up quite a bit, but spending increased faster. I blame the congress for that.

      Remember, congress is the group that sets up the budget. The president simply signs it or not.

      Bush Jr, while quite the moron, didn’t do this either. His tax cuts didn’t cause this. This was caused by congress partially deregulating the banks (and even SNL admits it was largely the democrats behind this), so that they could make more loans with less of a margin.

      Think of it as before, banks had to have $1 for every $5 they loaned out, and now they can loan out $100 for every $1 they have on the books.

      Frankly, this wouldn’t even be a problem in a pure deregulated system. Idiotic banks that did this SHOULD fail and let honest banks take over. However, the banks own the fed, which controls the country’s money supply. They are also far too intertwined and control far too much.

      Banking failures are expected. This is why each bank has a sticker on the doors that say that each account is insured for up to $100k.

      So it’s not even the partial deregulation that is doing this to us. It’s the large spaghetti tangle of involvements between the banks and the fed. (the fed being the non-government agency that decrees credit rate increases/decreases and actually prints our money, which they they loan to the USA. Yes, we pay interest on money we print!)

      • BlazerUnit says:

        @sodden: You’re grossly understating the role that the de-regulated regulations (my term) had. They were not socialistic rules that intended to stymie growth or redistribute wealth. They were in place to limit harm of the overall economy to riskier investments that both investsment and deposit banks made. THESE are the very rules that were mostly championed by Republicans , and its how stupid devices such as credit swaps and CDOs have shut down banks and killed available credit for everyone, from businesses to individuals.

        The Bush tax cuts are indeed a separate issue, but lincolnparadox still got it right. We went to war (twice, increasing defense spending) and cut taxes across the board–then expanded the government with Homeland Security and revamping of federal law enforcement agencies. The supposed benefit of new job creation by wealthy investors in corporations? Didn’t really happen.

        • lincolnparadox says:

          @BlazerUnit: There’s a lot more to it than just the deregulation of the credit system and Wall Street. Corporate greed has also hit an all-time high.

          If the money gained from the stock market invetsments had been re-invested in the company, maybe it would have trickled down. But, 3 years into Bush’s first term we saw more layoffs at all corps than i remember from the late-70s/early 80s. The economy was good, so it wasn’t poor sales. It was the combination of jobs being shipped overseas and the drive to make more profits “for the investors.”

          I was always surprised that Bush won a second term. With numbers alone, if you look at the number of people who were laid offer, it should have given Kerry a push over the edge. Maybe to many people were laid off at Heinz?

          Thanks

  21. AuntieMaim says:

    It kills me that, with this level of national debt, anyone (*cough* McCain *cough*) is out there saying we pay too much in taxes. We pay very low taxes compared to many other developed countries. The government provides services — whether you agree with that spending or not — that need to be funded. Yes, it’s annoying that a portion of the budget goes to weird pork barrel projects, and to me it’s even more annoying that we are hemorrhaging money at the “war on terror” and bailouts of irresponsible businesses. But it would be better to actually pay for those things than continually “buy on credit”, as this article points out.

    I wonder sometimes if GW Bush, having grown up rich, just doesn’t get having to control spending. It seems like, for him, there was always more money available. I would suspect it’s the same with McCain; although he talks like he came from regular folk and only came into money with his current wife, I’ve heard his mother described as an “oil heiress”. Anyway, that’s all speculation.

    There shouldn’t even be a debate over who is or isn’t going to raise taxes. It’s not feasible, as far as I can tell, to cut the amount from the budget that needs to be cut, although some have pointed out programs like SDI that would help, and McCain seems to think he’ll phase out Social Security. We as a nation will just need to pay more taxes, and I think Obama’s plan of rolling back the frankly ridiculous tax breaks given to the richest bastards in the country is a good start.

    • BlazerUnit says:

      @AuntieMaim: We have been trained to hate any and all taxes, regardless of what good they’d possibly benefit. We’re too quick to think that we can simply cut a few programs or cut spending here or there, and that everything will be hunky-dorry. Don’t you raise my taxes, gub’mint!

      My bretheren in my home state of Alabama has been reliably goofy about this. I have watched the richer suburban communities in both Birmingham and Mobile metros voluntarily raise their property taxes and sales taxes in order to fund better schools (or in some cases, their own school systems).

      Yet, in our Republican governor’s first term, he offered a tax initiative that would have done two things: 1) modestly raised Alabma property taxes to directly benefit educational spending that had suffered semi-annual proration and 2)made tax collection more progressive for the working poor. (Alabama then collected taxes on the first $5000 of income, and the measure would have nearly tripled that amount.) The governor went so far as to cite Bible scripture to curry favor with Evangelicals Christians who helped get him elected, noting that the benefits toward helping poorer Alabama families.

      The tax measure was defeated soundly.

      • Tux the Penguin says:

        @BlazerUnit: You seem to be missing the point in your own example.

        People have no problem forking over more money if they can see the tangible benefits (or at least its close to home). By raising their property taxes, the funds went to something that they wanted: their schools. People don’t mind that.

        Take the opposite stand here in Texas. We passed “Robin Hood” which took money from “rich” school districts to give to “poor” districts. Well, I lived in Arlington and we had, about four years before, passed a proposal to raise property taxes to fund our schools. It passed with 60% or so (sorry, its been about 20 years…). But when “Robin Hood” came in, we found out that the state was going to take what accounted to 30% of those new taxes (ie, total take + taxes = 30% of the new income). What did we do? We got rid of the property taxes and went to other means to fund our schools.

        That is it in a nutshell. People don’t like paying taxes when they don’t see their money. The federal government is the worst in that the taxes aren’t used what they are supposed to be used for. Social Security, for example. If the Federal Government were a non-profit (or operated under their accounting rules and legal requirements) all Social Security tax income would have to be left alone. But no, the federal government raided that fund… so now, congratulations, we all contribute to a Ponzi scheme.

  22. Ariah says:

    I’m very satisfied with our nation’s present level of national debt. It’s true that our national debt has multiplied many times over, but that’s because the size of our economy (and thus our ability to pay it) has increased even further. Back during WWII, our ratio of publicly held debt to GDP was at 120% – now it’s at less than 70%. By comparison, Japan’s is currently at 170%.

    Further, though our relative debt has been increasing in recent years, the amount of our taxes that is used to pay interest on the debt has been decreasing. Ten years ago 14% of our taxes went to paying that interest, whereas now it’s at less than 10%. With investors fleeing to the safety of our treasury bonds, I would expect those interest payments to become even more affordable.

  23. B says:

    Obviously America needs more money. I recommend America get another job. I hear Wal-Mart is hiring.

  24. kaylabear says:

    …Ask our richer, European ‘friends’ to travel here and buy more of our stuff. Has Krispy Kreme reached London yet…?

    And as a life-long resident/student/worker/tax-payer of the state of California, I am always surprised how little cash we actually have. Cali alone has Hollywood, Silicon Valley (my ‘hood), agriculture, and tons of cheap labor, which may or may not be a good thing, depending on how you view the whole illegal immigration issue. Yet, we’re always strapped for cash, our public schools a total shame, etc.

    A decent (read: clean, safe, and functioning), studio apartment in San Francisco goes for at least $1000 a month (and that’s the cheap, run-down end), but most employers gasp when you ask for more than just $12 per hour.

    None of it, from the state all the way up to the Federal government, adds up. Someone is clearly skimming off the top while another holds their fist tighter than the skin on a snare drum. Meanwhile, harsh reality continues for millions of people, and all as people around the world view America as the land where “streets are paved with gold.” Things are so twisted these days.

  25. ageshin says:

    I would advise you to look at the national debt at the start of the Regan era to now. This problem has been orcestrated by the Republicans. They have intentianly persued a policy of cutting taxes to the rich and spending more and more on the military and other projects of little social value. Bush has done this in spades. He has privitised much of the military to the benifit of his pals, and the expense of the taxpayers. Privitising does not save money, it merly shifts it to the pockets of privet individuals. We should return to a true progresive income tax, for both individuals and corps. Ending the occupation of Iraq and cutting spending on the vast pentagon budget. Remember, government is not the problem, it’s the Republicans.

    • BlazerUnit says:

      @ageshin: Wasn’t it Dick Cheney who said ‘deficits don’t matter’?

      Democrats certainly aren’t blameless in all of this, but much of the goofy mindset that helped cause these maladies can be traced to ‘Reagan revolutionaries’.

  26. primechuck says:

    This encompasses most agencies you know about, like the Pentagon and the Departments of Agriculture, Education, State, Labor, Justice, Transportation, Commerce, and Homeland Security

    I’m sorry but Education and Ag are outright not in the scope of the federal government. The others have some overlap and are probably with in scope of a liberal interpretation of Interstate Commerce.

    • papahoth says:

      @primechuck: Why isn’t education in the scope? Because Republicans say so? Local control of education has us ranked where in the world? Approaching third world level is where.

      • BlazerUnit says:

        @papahoth: I don’t care how conservative or liberatarian one is, nor how intelligent or justified their opinions may be. Any suggested elimination of the Department of Education makes you a kook, a nut, a screwball, a wacko, and pretty much any other slang term that insults your faculties.

      • primechuck says:

        @papahoth: Because it isn’t listed as a power of the government as labeled in the constitution and is therefor left to the individuals or the states. There isn’t really local control now.. More money is being spent per student now than ever before. By your implied timeline as things have been getting more and more federal, the US should be going up not down in rankings, eh?

        It does sound kooky, but it is a giant black whole of federal money to increase the size of the government. But hey, it is for the children.

      • Tux the Penguin says:

        @papahoth: Its detailed in this little thing we call the Constitution. More specifically, the 10th amendment “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”

        How about we start with that, going through the Federal Budget and actually reigning in the federal government to its constitutional bounds and implied powers.

  27. leftystrat says:

    It’s a lot more simple that people think.

    1. dump the *entire* lot of criminals
    2. try them for treason
    3. put their heads on the White House fence, arranged neatly
    4. gently suggest to their successors that we’re watching and we think a balanced budget would be a good idea.
    5. watch carefully

    Of course this would involve prying the Great Unwashed away from sports, beer, and Americans Idle. It may take a while.

    • papahoth says:

      @leftystrat: I would pay money to see it done. Pay more to participate. Could have a lottery to watch and participate in person. Big bucks for government.

  28. papahoth says:

    First its scary that the Chinese own so much of our debt. We are paying them tons of interest on it. Glad they have the money to invest, right?

    Second, stop electing Republicans like Reagan and Bushes. The debt decreased as a percentage of the GDP under every president since WW II except Reagan and the Bushes where it increased dramatically.

    Realize we are the lowest taxed nation by far in the industrialized world. By far. We want it but we don’t want to pay for it. Our infrastructure is crumbling and just like it did with the Roman, we will surely crumble with it.

  29. P_Smith says:

    Return tax laws to what they were in 1950.

    Hell, 1980. Either would be enough to cover the debt by making the wealthy pair their fair share, or at least, more of it.

  30. MeanPeopleSuck says:

    Awesome article Carey. Don’t ever leave.

  31. sodden says:

    Raising taxes….it is NOT the same as raising revenue.

    Sorry, but you guys fail on this one. The government can’t simply demand more revenue.

    Think of a contractor who starts demanding higher rates. He might get them, and have more yearly income, OR he might lose clients and end up with less income for year.

    Sadly, raising taxes means eating a bigger piece of the economy, which means the economy has less to use to grow.

    Now you can say “Oh, that’s the trickle down theory! That’s been disproven! Look at what it did to our economy!”

    Wrong again. It happens to match part of the trickle down theory but that doesn’t mean it’s the same, nor has it been disproven. I don’t believe anyone could honestly claim that our economy is in the toilet right now because we lowered taxes, at least without laughing.

    Oh, and the part about making a charitable donation to reduce the debt… that had me in stitches. I’m sure our congress will thank you to your face while laughing at you behind your back.

  32. Any viable solution to this issue requires a fundamental change in the role that Americans view their government as having in their lives. A government tasked to provide the myriad services currently available will always be expensive, and as long as human beings are in charge, will always run over budget. A smaller, more limited government that is stripped to the basic roles of infrastructure and defense, coupled with a shift toward more efficient means of tax collection and more transparent means of tax revenue expenditure, would reduce this debt and prevent future debt from being assumed.

    Of course, as long as people who work in government want to keep their jobs, and as long as the current appetite for an expanded government role remains, this is an impossible proposition.

  33. The worst part is neither major party has show any real fiscal restraint in a LONG time. For the most part the economy was able to grow in SPITE of this with lax credit restrictions that kept people spending.

    McCain will spend us into oblivion to fund preemptive wars. Obama will dump even more dough into wasteful social services that the feds have never managed efficiently.

    Why can we not hold the FED to the same rules of any business owner: If you do not run a tight ship, you will go out of business. Wal Mart wouldn’t be around (as evil as it is) if it wasted money like Washington, D.C. does.

    Alas no one has the heart or the balls to take everything back and vote 3rd party until the DEMS and GOP listen to us.

  34. sam-i-am says:

    Our debt is what – 30 or 40% of our GNP? It has been much worse – like during WWII our debt was over 100% of our GNP.

    Our debt is bigger than it has ever been, but so is the amount of money we generate. I’m not particularly worried.

  35. IrvCrapper says:

    What percentage of GDP is the debt, and how does that compare with other countries.

    Expect to see this argument made again and again as Congress and the White House will be run by Democrats who don’t want poor kids to die in emergency room waiting rooms with undiagnosed coughs.

    But if you compare our debt with that of other industrialized countries in terms of GDP, it isn’t that bad. I’d rather borrow from China than allow people to die who could have been helped.

    I’m sorry to see Consumerist posting this kind of message here.

  36. reflection717 says:

    Someone correct me if I’m wrong but didn’t Clinton have a balanced budget that forced that National Debt Clock to run backwards for a while? If he can do it so can someone else.

  37. bohemian says:

    I find it rather frustrating, where and how to cut spending or where to spend seems simple to me but the govt. will never do it. Some Rush Limbaugh listening six pack chugging moron will scream against it. Ugh.

    1. Cut war spending. Finish Iraq post haste. Restructure the “war on terror” to be more focused and realistic.

    2. Cut stupid mandates like no child left behind and faith based spending. Both are a joke and waste money. Restructure education to meet goals and provide equal and quality education.

    3. Legalize pot, growing, selling & consuming. Tax it like tobacco. This is so stupid and wastes so much money in law enforcement and locking people up.

    4. Make the rich and corporations pay their fair share. As someone else suggested, set it back to 1950′s tax rates. Cut all corporate welfare and massive corporate tax breaks. I would put the only exception would be cooperative efforts on alternative energy.

    5. Fully fund Amtrak and fark the airlines. It would be better from an energy independence standpoint. Solve the air travel headaches and provide affordable transit options to more parts of the country.

    6. Gut all the parts of the farm bill that allow companies like ADM and Cargill to collect from the AG bill. Cut funds going to people who don’t directly own the farm.

    7. Cut and restructure govt. contractors related to defense. We do not need KBR and Halliburton providing food and showers at 10x the actual cost. The only things the military should be contracting is production of arms and equipment.

    What really makes me mad is the first place the Republicans seem to want to make cuts is to things like social security, medicare/medicade, and critical infrastructure.

    Leaving the disabled & elderly on the streets while our bridges fall down is just stupid.

    • Tux the Penguin says:

      @bohemian: Oh where to begin…

      1. I agree. And while we’re at it, withdraw troops from Germany, Japan, and anywhere else that they aren’t really needed. Seriously, I don’t think we need to worry about the Third Reich anymore…

      2. Go through the Federal Government’s budget and cut ANYTHING that is not either explicitly or implicitly given to it by the Constitution. Department of Education? Gone. Faith-based spending initiatives? Gone. If we want those, we need to pass amendments.

      3. Eh, I’m not so much with you on this one. But why not. But make sure that being high in public has the same repercussions as being drunk in public.

      4. How much is their “fair share”? Businesses don’t pay taxes, those taxes are passed onto their customers as higher prices or take away from the investors and owners of the company. No, instead of dealing with an income tax system, remove it and put in a consumption tax. Tax people on what they consume. Not to mention that inherently encourages savings!

      5. Ignore both of these and let businesses that can’t make money FAIL. Amtrack won’t cut it with current ticket prices. Some airlines can’t. But while we’re letting them fail, for God’s sakes lets update the air infrastructure.

      6. Bingo. You don’t own land… no cash for you.

      7. Remove no-bid. And if the lowest bid is too high (ie, the government could do it cheaper itself) then do it yourself. If 10x cost is still cheaper than the government could do it itself, then pay it.

      But lets add on a few others.

      8. Allow younger workers to have the option to “opt out” of Social Security for a “fee” of 1/2 the normal tax. The rest MUST be put into 401k or IRAs, in addition to the normal limits. In 20 years, have Social Security be what it was original meant: a safety net to keep people from starving. Not something for people to retire on.

      9. Term Limits on Senators and Congressmen. Or at least “cooling off” periods (2 terms in, 1 out). Does anyone think that someone who has been there 20 years really represent their constituents?

      10. Lastly, overhaul our voting system. And maybe, just maybe, we could change the date of the national votes onto the Saturday instead of Tuesday… so more people have more time to vote. Require IDs to vote and register. And provide those IDs (DL’s) every month on one Saturday for free. Hell, or just make us dip our thumb in ink like the Iraqi’s do!

  38. brokenimage says:

    Have the government stop borrowing money from the Federal Reserve at interest. Government should print their own money, interest free.

  39. the worst thing you could do is throw away your “money” into the never-ending hole called the ‘debt’.

    What we need to do is demand that our congress SHUT DOWN the Federal Reserve (which is NOT a Federal Agency – it’s a PRIVATE BANKING CARTEL), and print our ‘money’ ourselves.

    Hard as is will be to believe: All your IRS tax money DOESN’T go to providing needed services from our government…it ALL goes to paying the ‘debt’ we pay for the private banking cartel (known as ‘the Fed’), to print our money for us.

    We can STOP this…by printing our currency ourselves, which is one of most important powers Congress has – but won’t do.

    Don’t believe me?

    that’s alright, keep paying.
    Once you die, your children pick up the torch and keep paying. So will THEY’RE children and they’re children, etc., until we stand up, close ‘the Fed’ and print our currency ourselves.

    Curious as to how this has become this way?

    Check this out:

    Then, do your OWN research and discover for yourself what they DIDN’T teach us in school about our history and how we’re all slaves to this ‘cartel’.

    it’s shameful. We’ve been lied to for almost a 100 years.

    • vastrightwing says:

      @EyeintheLAsky: My sentiments exactly!
      My family is changing our habits starting last week:
      1) Credit cards only for dire emergencies.
      2) Cash is king. No cash? No spend.
      3) Doing business with local businesses.
      4) We’re cutting back our consumption on everything.
      5) Paying our debt down as fast as possible.
      6) Going to town meetings and voting on everything where someone else decides how to spend my money.
      7) Writing my representatives that I don’t like my tax money paying interest on debt and on wars to prop up our economy.
      8) Telling everyone I know my own list and why I’m doing it.

      I can’t stop the madness, but I can help reduce it.

  40. parnote says:

    Isn’t it amazing that under Clinton, even with all of his failings, that he managed to get us to a point where we actually had budget surpluses! And isn’t it ironic that the Republicans say the Democrats are going to spend us to death, yet a) the last democratic President (Clinton) managed to create budget surpluses, and b) that Obama’s plans actually cost less than his Republican counterpart. Of course, I am in full agreement that both of these morons helped create the problem that we are now faced with. I cannot, with a good conscious, vote for either one. I believed we are totally screwed with either one … or their running mates, who may very well, at the end of four years, be occupying the chair in the Oval Office.

  41. vastrightwing says:

    Being part of the vast right wing conspiracy, my solution is to close the Federal Reserve and have an elected and ACCOUNTABLE person make monetary policy. The idea that a bunch of wealthy bankers are going to make good policy decisions for anyone except themselves is beyond my ability to fantasize.

  42. TPS Reporter says:

    Do you realize that the top 10% of individual money earners in the US pay 70% of the taxes that pay for these things? The income figure for that is approximately 108K and above a year. And you have to make more than approximately 32k a year as an individual to even pay 97% of the taxes collected. Anything under that as an individual and you pay 3%. This is all 2006 info, the latest I could find.

  43. xrmb says:

    so, may I ask if anyone knows what/when the debt started? I could think of WW2, or the big crisis before…

  44. giggitygoo says:

    The elephant in the room is the fact that the nation’s social programs are driving the deficit each year, particularly Medicare. The projections show that these programs will simply become unaffordable in the not too distant future, no matter how high you want to set taxes. With life expectancies increasing with new medicines and technologies, more people retiring than replacing them in the workforce, and the ever increasing cost of medical care, you have an unsustainable situation. Every year entitlement programs take up a larger percentage of the national budget. What do we do when they reach 100%? Yet, as the author mentioned, no one seems to care as all attempts to make reasonable changes (Like raising the eligible age as the average lifespan increases) are quickly dismissed. Essentially, the baby boomers have decided that they will take all their entitlements no matter the cost and leave their children to clean up their mess. At some point, we have to realize that cradle to grave entitlements paid for by the government simply will not work over the long term. We can ignore it now, but when we do we just make the consequences worse as we delay the inevitable.

  45. TMurphy says:

    How about we start a fund (maybe made up of our tax returns), and mark it that it can only be touched by congress when they’ve had a balanced budget for X number of years, where X is the number of years they took from the fund’s creation to first get a balanced budget (if we make the fund today, and congress finds the black in 2011, they get the money in 2014 if they don’t go red before then).

  46. mzs says:

    The first steps should be to leave Afghanistan and Iraq. Then cut the military spending by 10% from what it was in FY 1999. Then return the income taxes to what they were in 1999 as well.

  47. themanishere says:

    sell toys to China

  48. SanyuktaLumpa says:

    The national debt is a relatively small part of the financial troubles facing the US and most of the developed world. The US has unfunded liabilities (future promises of funding) that total somewhere in the neighborhood of $45T, not including the current $10.5T. Programs such as Social Security (~$5T) and Medicare (~$38T+) are the main problems. The problem is so substantial that there is literally no way to solve it. Most free market economists argue that we could grow the economy out of the problem. While this may work with with the national debt (unlikely), it is simply impossible with Social Security and Medicare. Social Security payments are based on cost of living and other factors related to the performance of the economy; thus, better economy equals greater entitlement payouts. Medicare is beyond control; the cost of medical treatment is spiraling out of control as it becomes feasible to live far beyond “natural” ages.
    David Walker was the former Comptroller General for the US (e.g. national accountant). Check out this video about our fiscal problems http://video.google.com/videosearch?q=david+walker&emb=0&aq=f#emb=0&q=david%20walker%20berkeley

    The video is long, but here’s some truly shocking numbers. Just to maintain balance of payments through 2070 for Medicare and Social Security people would have to make the following payments to the IRS: $150,000 for every single person in the US, or $365,000 per full-time worker. This would be a one-time payment that is not tax deductable, and was based on 2005 numbers. The total net worth of Americans is estimated to be $48.5T in 2005. Ouch

  49. grapedog says:

    If you look at some countries in Europe, say for example Ireland, 44% of their paycheck is gone…poof, right off the bat. A lot of services are covered with that 44%, but thats still a good deal more than we pay. The only thing I don’t know is how that is factored across the classes, lower/middle/upper.

  50. h0mi says:

    Step 1 has to be elect politicians who are serious about reducing the deficit/debt the federal government has. That should also include throwing out the ~468 clowns in office we have today that are running for re-election this year. If iraq, abortion, gay marriage or some other issue is more important to you, don’t be shocked when the politicians you elected don’t act as concerned about the deficit/debt as you want them to be.