Why should you care? It’s the national debt, stupid!
For the Appeal
Why should the average citizen care about the size of the national debt? The answer is that the size of the national debt affects most aspects of every American’s life whether they understand it or not.
The general rule of thumb is that smaller national debts are good, and larger national debts are bad. Every dollar of interest that must be paid on the national debt is a dollar that could either be: (1) invested in infrastructure or other government-provided goods that produce long-term returns on investment; (2) spent on day-to-day operations of governmental agencies; or (3) not taxed for in the first place, thereby reducing federal taxes. The more interest that you pay, the poorer you are for it.
Quality of life issues such as health care, education, economic stability, environmental pollution, public works projects, etc., are all affected by the level of debt that our nation carries. The actual value of the money that you earn is directly dependent on the size of the national debt. The higher a nation’s debt is, the weaker that nation’s currency will be. The continually rising prices of oil, wheat, rice, corn, steel, copper, aluminum, and all other commodities are a reflection of the value of the U.S. dollar. Our extraordinarily high national debt has caused the U.S. dollar to plummet versus other currencies, thereby reducing America’s purchasing power on world commodity markets.
An unintended benefit of selling U.S. Treasury Bonds on international financial markets is that we no longer have to fear invasion by the Communist Chinese government that is rapidly polluting its way to becoming the next world superpower (as did America in the 20th century). The Communist Chinese government has bought such a significant portion of our national debt that they need only foreclose on their loans should we fail to make timely payments. As a result, military action is no longer a viable option for them because there is no point in destroying the collateral for their loans.
The Bush administration may have unwittingly stumbled upon a new global defense strategy here, i.e. national debt. By simply peddling Treasury bonds to Iran, North Korea, al-Qaida, Hezbollah, Hamas and other adversarial entities, the Bush administration could significantly reduce the threat of foreign aggression and terrorist attacks. These enemy states and terrorist groups will do what they must to protect their own financial interests. By default, they will be forced to protect America’s interests as well.
This strategy does, however, run the risk of international bond holders going into federal court demanding tighter fiscal control over how a U.S. administration spends money, and raises tax revenues. Congress used to have the power to perform these functions, but they sort of lost it over time to the Executive Branch.
International bondholders would be well within their rights to demand an end to profligate spending throughout the entire spectrum of the federal budget. They may also conclude that the current U.S. taxation system is fundamentally flawed with far too many loopholes for corporations, wealthy individuals, and the underground economy to slither through. To protect their interests, international bondholders may devise a new taxation system more in tune with the 21st century global economy, and impose it by court order. Once they get spending down, tax revenues up, and the national debt being paid down every month, the dollar will reverse course and begin to rise once again. When it does, the value of U.S. Treasury Bonds will rise as well to the delight of international bondholders. As an added benefit, imported goods prices will fall, the U.S. economy will spring back to life, and the quality of life for the average American will improve. Fiscal discipline is its own reward.
With global tensions moderating as a result of this “National Debt Security Strategy,” America will no longer have to keep funding many of its military bases on foreign soil. For example the Germans will just have to figure out for themselves how to defend against those belligerent Belgians, diabolical Danes, the Swiss Guard, and pugnacious Poles. The South Koreans, who already own a significant share of the U.S. national debt, will have a new commonality of interest with their North Korean cousins, thereby reducing tensions on the Korean peninsula. The Japanese, who have successfully defended themselves against Godzilla, Mothra, and a plethora of radioactive sea monsters, haven’t really needed a U.S. military presence since the mid 1950s. The attendant savings realized through closing foreign U.S. bases could be directed toward paying down the national debt to the benefit of all U.S. taxpayers.
The upcoming federal elections will unquestionably determine the fate of the United States for decades to come. It is crucial that every single candidate for Congress and the presidency be asked: (1) what is their detailed plan for paying off the national debt; (2) how many years will their debt reduction plan take; (3) how and from whom do they propose to raise needed tax revenues to pay off the national debt; (4) how do they plan to change the current spending priorities of the Bush administration that have run the national debt up to $9 trillion; and (5) how do they plan to get their budget proposals through both houses of Congress and signed into law by the next president?
Any candidate who evades answering these five basic questions should not be rewarded with your vote. Clueless federal office holders are responsible for the national debt growing to $9 trillion. Shucking and jiving around this issue is simply no longer acceptable.
• Fred Kessler of Carson City is a general contractor.