Monday, July 25, 2011

How High is the Debt Ceiling?

$14,300,000,000,000.00 or fourteen-point-three trillion dollars. That's a lot of money. If you stacked one-hundred dollar bills flat, one on top of each other, one million dollars would be four feet high. A stack the size of the total federal debt would be over 10,000 miles high!! By comparison, the diameter of the Earth is 7900 miles. I repeat, that's a lot of money.

The federal debt is the total amount that the United States has borrowed from US government bond owners: Federal Reserve and other Intergovernmental holders plus foreign countries/individuals, domestic individuals, banks, mutual funds, and pension plans. Many of you know that I'm a deficit/debt geek and have been for over forty years. You'd think that I'd be delighted that this issue is finally getting the attention it deserves, but this major threat is not being dealt with in an adult way; it's making me crazy.

If you were a struggling family, you can only get out of debt by doing two things: 1) decrease spending, particularly on your biggest discretionary expense, and 2) increase income. You can only cut spending so much. You won't let your children starve. So, you get a second job to generate more income. That's the responsible thing to do.

On a national level, to make a dent in the debt or just to reduce the annual budget deficit significantly we have to do to things: 1) decrease spending on the biggest discretionary item in the budget: military, wars and weapons, and 2) increase revenue (i.e. taxes). Few in Congress have guts enough to propose tax increases, except for on million-dollar earners and oil companies. Wimpy Democrats dare not object to increases in defense expenditures or getting out of a war or two. And don't get me started on our president. I'd categorize him a liberal Republican if they weren't already extinct.

Budget ceiling theatrics isn't really about fiscal responsibility. If it were, Republicans would not have voted to raise the debt ceiling seven times when George Bush II was in office and Republicans controlled the Congress most of the time. Social Security and Medicare do need some adjustments to make them viable for our children and grandchildren. But how can you morally cut benefits for a program that mostly pays for itself and that saves many barely surviving people while NOT asking massively profitable corporations and highly paid executives to share in the sacrifice to help balance our budget.

Oh, one more thing. If it has taken you four minutes to read this, the federal debt has increased by $5 million dollars, a stack of $100 bills twenty feet high. Check out the debt clock: