Michael Waldron: Our national debt a year laterPublished 9:11pm Wednesday, March 7, 2012
One year ago, the Niles Daily Star published my first guest column. It was titled “Our Debt” and was inspired by the imminent need to increase the public debt limit. Five months later in August, the Congress finally got around to dealing with the debt crisis.
The Congress then punted to the end of 2011 and in November the “Super Committee” folded up its tent before the self-imposed deadline and declared failure. This year in January, the White House presented a budget to Congress last month that will increase our debt by another trillion dollars. When will we become serious about the debt crisis?
I have a proposal to offer. Suppose that all elected officials in the federal government take a cut in their own salaries proportional to the deficit that exists that year. For instance, if the deficit is $1 trillion in a budget of $3.5 trillion, then the president, vice president, every senator and every congressman would take a 1/3.5 or 28.6 percent cut in their salaries the following year.
My proposal wouldn’t fix the budget crisis by itself. In fact, the savings would be a drop in the bucket. However, politicians, like children and thieves, spend other people’s money. Maybe a personal penalty might break that mind-set in Washington, D.C.
Politicians have given us stuff paid for by our own money in exchange for our votes for decades. There has been no penalty for being irresponsible with our money. In that sense, there should be special penalty for senators.
The senate has failed to pass a budget for more than 1,000 days. Perhaps, senators’ pay should be cut by twice as much as congressmen’s pay. Maybe senators should receive no pay whatsoever if they fail to perform such a basic responsibility as passing a budget.
I would extend my proposal to the state and local level. The elected officials at the state and local level should suffer salary reductions if they cannot balance the budget. Of course, many state constitutions mandate a balanced budget. Say, there’s an idea.
Rather than punish elected officials, why don’t we pass a constitutional amendment making it much harder for the government to spend money it doesn’t have?
I realize that many people believe our debt crisis can be solved, in President Obama’s words, if the rich pay their fair share. Really?
Do people know that the top 5 percent of earners pay more than 50 percent of the individual income tax collected in this country and that about half of all Americans pay no income tax at all? So what would be a fair share for the rich? We have a debt problem and an unemployment problem in this country. So, if we tax the rich more, how will we increase employment? For many people this won’t sound intuitive, but the economy always improves when the climate for making money improves. When money-making is taxed excessively or risk-taking becomes more uncertain, people don’t risk money and the economy slows or contracts.
My argument that borrowing and taxing the rich don’t work doesn’t connect with some people in Michiana, I’m sure many people will shrug their shoulder.
What does this have to do with me? I’m not rich. Well, I’m reasonably sure that everybody in Michiana spends U.S. dollars. Once our debt grows large enough, the word’s confidence in our dollar will fall. Then everything we buy from abroad will become more expensive. Cars from Japan, light bulbs from China, computers from Mexico, shirts from Malaysia and oil from outside our borders will be priced higher because our dollar isn’t worth as much as it once was.
By the way, when we reach that level of debt, the share of our government devoted purely to paying the interest on our debt could take up as much as half our budget. One way or another, the consequences of our present foolishness will catch up with us.
I lived in Greece for 2.5 years from 1978 to 1980. I’m very familiar with the Athens area of Greece. When I read about 100,000 Greeks rioting in Syntagma Square in front of the Greek parliament, I can remember that place in more peaceful times. More and more people are predicting that we’re only five to 15 years behind Greece.
There will come a time when Americans may take to the streets to protest cuts in the U.S. government. By then, the USA will have about as much choice about cutting government as the Greek government has today. The longer we wait to deal with our debt crisis, the more severe will be our day of reckoning.
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