Nonsequitur: How Do We Pay Off Our Debt?
October 18, 2013
We don’t. What Senators Reid and McConnell, and President Obama, hope you don’t figure out is that this administration has no plans to pay down the national debt. In fact, it plans to increase our debt.
The US National Debt is currently just under $17,000,000,000,000.00. (See my previous blog entry for the exact amount.) The interest we pay on the debt annually is $400,000,000,000.00. (That’s $17 trillion and $400 billion.)
We could use tax revenues to pay off the interest. But we don’t. $400 billion is about 16% of our tax revenues for last year. However, this administration has run deficits (overspending) of about $1 trillion every year that Obama has been in office. Along with costs for Entitlements and Defense, this administration has spent billions on the Stimulus, bail-outs, green incentives, expanding and enforcing new regulations, and, of course, the ACA.
We can’t use revenues to pay off the interest we owe because we’ve already spent all our revenues. We are always in a budget deficit. So we BORROW money to pay our interest due on our debt. This adds to the principal we owe and adds to the interest we owe next year. Instead of paying off debt, we are growing debt.
The debt “ceiling” is a problem for this administration because it plans to continue to spend and continue to borrow. Again, we have enough revenues to pay off the debt interest, and maybe a little principal. But that would mean not spending money on new programs like the ACA or not expanding regulations under the EPA or making real reforms to Entitlements or making real reforms to the tax code or simply tightening budgets to improve efficiency. (What did we learn from the “shut down”? That’s right – we have 900,000 non-essential federal workers. What did we learn from “Sequestration”? We can make budget cuts, even poorly planned, untargeted cuts, that reduce the deficit without crashing the economy or the government.) President Obama doesn’t want to do any of these things.
President Obama does not want to reduce our debt. He does not want to reduce or slow spending. President Obama, and Senators Reid and McConnell, plan on spending and borrowing even more. (In the recent deal to raise the debt “ceiling,” over $2 billion was earmarked for a dam project in Senator McConnell’s home state. That’s another $2 billion added to the debt.) Besides, to borrow a phrase from Senator Reid, “Why would they want to do that?” Government officials may incur debt for the nation, but they are not responsible to pay it off. Tax payers are. (To see your individual share of the national debt owed, click here.)
How do we pay down our national debt? We can’t. Not while President Obama is in the White House and Senators Reid and McConnell lead the Senate majority and minority. Until voters make a change to the balance of power in Washington, nothing will change.