Until Debt Do Us Part

 

When Santa Monica Mayor Richard Bloom addressed the METal breakfast Saturday morning one thing he said made me think of the debt ceiling mess in Washington.

“I just came back from the Sierras,” he said, from a retreat put on by Southern California Edison and the League of California Cities.

Whenever politicians buddy-up with business and lobbyists this way I feel uneasy. Santa Monica is a nice place, where I’ve lived for 15 years. But my local taxes never go down and traffic and parking is a big problem. Bloom is focused on solving that and maybe I should be pleased, but I’m not.

I feel that politicians always do the bidding of whoever pays them off or threatens to bring them down. Which brings me to Washington’s “Big Mess” over government spending and the debt ceiling. News reports tonight say a deal was reached, but let’s not click our heels just yet.

A few days ago I posted comments to the e-mail list of METal, run by Ken Rutkowski. METal is a networking group of smart professionals in the field of media, entertainment and technology. I expressed concern that our government will default on its debt and destroy my retirement fund and asked for other viewpoints. It generated some lengthy and passionate responses.

Richard Bloom (left) and Ken Rutkowski at METal breakfast. Photo by Cooper Bates Photography

Political discussions feed off anger and resentment. And the other side is always wrong and at fault for the mess we’re in. But maybe we’re all wrong, or all to blame.

“Most average people are completely confused by government finance,” wrote Joe Benowitz, a corporate executive with diversified experience in finance. “But the basics are really no different than personal finances.”

In a perfect world you should earn more than you spend. But when you’re short on cash you borrow and pay it back in time. The U.S. has failed miserably in this regard and is using debt as a revenue replacement, Benowitz wrote. Some presidents have done better than others in trying to shrink the debt, he pointed out.

When it comes U.S. finances a common measure of success or failure is the ratio between debt to gross domestic product. What you want is to lower debt relative to GDP.

“Since 1977, only two Presidents have reduced the debt to GDP ratio,” Benowitz wrote. “These two Presidents were Carter and Clinton. All other Presidents have increased the debt to GDP ratio, or failed economically.”

You often hear Republicans say those “tax and spend” Democrats are the problem. But the data show otherwise.

Alex Lightman noted, “Republicans ran on platforms that included smaller government, but no Republican in the last thirty years has reduced the size of the US government.”

Among his many thoughts in the debt issue Lightman added, “Structurally, the US has set itself up for failure.”

US Federal debt as a percentage of GDP

Among the problems is U.S. spending on wars and defense. One METal list commenter provided this chart from the New York Times that shows the enormous size of defense spending relative to other departments. Still, overall spending has gotten progressively worse and there’s no obvious fix.

“The dialog degrades into ‘eliminate the Department of Energy‘ or ‘eliminate the Department of Education,” he wrote. You could eliminate these along with transportation, veterans benefits, law enforcement and a whole bunch of other programs “and STILL have a deficit!”

Yes, it seems we are wallowing in one big wretched mess, with no end in sight. And while a few comments on the e-mail list bagged on the Tea Party, this person said they are owed “a HUGE thank you” for pressing the issue of debt reduction, even though most of them don’t realize to address their desires means they will see cuts to their own personal benefits, to include Social Security, Medicare and veterans benefits, “And I bet they won’t like that!”

He added, “Both sides are deluded. Both sides try to muddy the issue by keeping us focused on issues that are not even CLOSE to the core issues.”

Michael Robertson chimed in, “What I find amazing is that this battle is not even over the real issue, which is entitlements. The sides are battling over piddly little items without the courage to tackle the real issues related to runaway spending. I wonder when THAT day of reckoning will come.”

Robertson also took issue with comments that heaped blame on Republicans.

“The House controls spending and Democrats have controlled that wing of the government during the biggest debt explosions. It should be clear to all that it’s too easy for politicians to give away other people’s money to curry favors and get re-elected.”

Perhaps the best way to wrap this up is using comments from one venture capitalist who agreed with Robertson that entitlements are the problem as he wrote with exhaust, “I don’t believe we will see any substantive changes on the core entitlement programs in ‘the land of junkie politicians and complicit citizens‘ until the den of feeding rats have sought out every last form of taxable capital.”

In my office the other day I was discussing the debt ceiling matter with a Republican colleague who was giddy over the thought the debt ceiling mess would bring down our government.

“Take it down!” he exclaimed, “Take it down.”  I responded, “Perhaps, but I don’t want my house to come down with it.”

And that seems to be the case here. We all want the problem to be fixed. But it seems that it won’t until ALL of us are willing to absorb some real serious pain. Are you ready?

Strength & honor,

Brian

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3 Responses to Until Debt Do Us Part

  1. Ivan Goldman says:

    If government expenditures bring bankruptcy, why isn’t Norway bankrupt? Instead it has virtually no employment and its per capita income is much higher than ours. $54,600 versus $47,200 here. Check it out in the CIA World Factbook. We’re fed a never-ending avalanche of right-wing bullshit. Don’t swallow it.

  2. Pingback: Fear, Calamity And The Republican Tea Party | Deagon's Digest

  3. Scot D says:

    That never ending avalanche of right-wing bullshit costs a fortune to produce.
    But the truth is free.
    http://en.wikipedia.org/wiki/National_debt_by_U.S._presidential_terms

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