BRIEF HISTORY OF NATIONAL DEBT

Interest on the US Debt was approximately 451 billion dollars in 2008 and 383 Billion in 2009 (lower due to record low interest rates). The 2009 interest payments on the debt are more than we receive in corporate taxes from every single business in the US. A lot of blame and finger pointing always surrounds any conversation between our political parties concerning the national debt. The truth is constantly blurred so what really contributed to the debt and who is at fault?

First, what is the national debt? The government spends money just like people to fund operations, pay for programs, etc. The government collects revenue in the form of taxes and fees. Any spending above the revenue they take in is funded by issuing debt instruments such as Treasury bill, notes, and bonds. These debt instruments are purchased by everyday people and corporations but the bulk of them are purchased by foreign countries.

Another form of debt was created when the US borrowed from the Social Security fund. The fund was running surpluses and it seemed like a good way to get a free loan. However, excessive borrowing has left us in a position where we will have deficits by 2016. In other words, we will not be able to pay out the total social security funds owed to the people, due to the large amount of baby boomers starting to collect.

The US historically has always carried debt but the debt was relatively small until 1980. Ronald Regan made reducing the debt an important campaign issue in his 1980 presidential run but the national debt tripled during his presidency. This was caused by massive military spending during the cold war coupled with “Economic Recovery Tax Act of 1982”, the largest tax cuts ever enacted. Regan’s economic policy (Reganomics) was considered extreme even by the Republican Party. While running against Regan in 1980, George Bush called Reganomics “voodoo Economics.” Although the Regan economic policies now left a deep national debt of 3.3 Trillion by 1990, they created a period of sustained economic expansion.

Soon after George H Bush became president, the savings and loan businesses, de-regulated by Reagan collapsed, adding $150 million to the national debt. In addition the Gulf war did add to the debt but was partly funded by Saudia Arabia, lessening the debt load. He left in 1992 with the national debt now at 4 trillion.

Fast forward to 1993, President Bill Clinton presented to congress the first balanced federal budget since 1969. By 1998, tax revenue exceeded expenditures. Clinton’s 2nd term produced 4 consecutive budget surpluses and in 2000 Clinton announced the largest pay down of the national debt in history. Clinton accomplished this by raising taxes and creating a pay as you go plan.

Following Clinton, in 2001 George W Bush started the first of two terms and a record explosion in spending and increases in the national debt. “President Bush promised that he would "retire nearly $1 trillion in debt over the next four years. Combination of tax cuts and huge spending budgets led to a national debt of 11 trillion (including the TARP passed by George W Bush) and a running deficit over 1 trillion dollars in the budget.

More recently, since taking office, Obama has passed a stimulus plan and several small spending programs bringing the total deficit to now stand at 12 trillion. Obama is quick to point out that massive deficits left little choice. “I found this national debt, doubled, wrapped in a big bow waiting for me as I stepped into the Oval Office. “ -- Barack Obama

A Majority of Americans are dissatisfied or angry with the way our national government operates…is it your fault?

Check liberal or conservative media sources and you will find one common agreement: Americans are unhappy with the way our government is working, especially congress. What is wrong and who is to blame? The Republicans will point to democratic policies as the reason. Democrats will blame republicans for hindering policy. We elected these officials so is it our fault? The answer is not that simple and may surprise you.

Let’s get out the obvious. A ‘good’ election turn out is one in which 50% of the registered voters show up in a presidential election. In non presidential elections, the turn out is usually around 35% of the potential voters. In the last non presidential election in 2006, there were 220 Million Americans old enough to vote. Only 135 Million of them actually registered to vote and 80 Million actually turned out to vote. Would more votes solve the problem? Probably not.

How often do we see talking points and rhetoric being spread around the internet? While some of this information has merit, most of it is factually untrue or distorted. We often hear talking points from both political parties rather than actual concise legislative ideas. Does every republican believe the healthcare reform plan is a bad idea? Did every democrat believe the George W Bush’s Social Security plans were a bad idea? In an effort to constantly get back power in congress, our leaders play against each other rather than work together.

Does our vote matter? It does only if you fulfill a simple task. We need to communicate to our congressional representatives. Sending your representatives emails or making calls to their office ultimately will force them to make decisions on behalf of the people. Our congressional leaders know that if they upset the majority of registered voters, their political careers could be short lived. This does work and I have seen many examples of our congressional leaders changing their stance based on popular opinion.

Do I have time to do this? Yes you do! It’s a very simple process of identifying your reps and then sending an email or making a call. If you call, most often you will speak to a staffer. Tell them you are a registered voter and voice your concerns. Be specific in your correspondence. Let them know where you stand on important issues and explain that your vote hinges on how well they match up with your stance.
Here is a simple link to find your congressional members.
http://www.contactingthecongress.org/

What is the truth and details on the issues in front of Congress…stay tuned.