Place your bet on the deficit

Think about the debate and political wrangling in Washington. They are all fighting over raising the debt limit. I say again, raising the debt of the US to some number above $14 trillion. Hey, that’s no big deal it’s only debt and as soon as we raise the limit we will keep adding to it. Does anyone wonder how long this can go on?

Look at these facts from an opinion piece by David Brooks in the Wall Street Journal:

Consider a few facts. The Bureau of Economic Analysis tells us that total government spending at all levels has risen to 37% of gross domestic product today from 27% in 1960—and is set to reach 50% by 2038. The Tax Foundation reports that between 1986 and 2008, the share of federal income taxes paid by the top 5% of earners has risen to 59% from 43%. Between 1986 and 2009, the percentage of Americans who pay zero or negative federal income taxes has increased to 51% from 18.5%. And all this is accompanied by an increase in our national debt to 100% of GDP today from 42% in 1980.

Does all this sound like we are heading in the right direction? 

You could take the view of Paul Krugman and say we haven’t spent enough, you could take the position of Ron Paul and say default now and avoid bigger problems down the road. You could take the view of liberals, raise taxes and go merrily on our way (for now) or we can add classes in chopstick use to school curriculum and attempt to acquire a taste for curry.

Thomas Jefferson was no stranger to accumulating debt and Alexander Hamilton was for a strong central bank but I suspect they are both spinning now at the extremes we have reached.

One side of this debate is right and the other wrong.  Place your bet… with your future. Do you know where your savings bonds are?

Related articles

• Raising taxes is not the answer (quinnscommentary.com)
• Paul Krugman Calls Out David Brooks for Playing the ‘Both Sides’ Game on Government Obstruction (crooksandliars.com)
• U.S. Inches Closer To Downgrade With No Debt Ceiling Deal In Sight (huffingtonpost.com)
• Economists React: Fragile Recovery Can’t Afford ‘Policy Mistake’ (blogs.wsj.com)
• IMF calls for action on US debt (bbc.co.uk)