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Why the national debt matters to you

By Jill S. Farrell
web posted October 27, 2003

First, lets take care of some vocabulary. The deficit is the fiscal year difference between what the Government takes in from taxes and other revenues, and the amount of money the Government spends. Think of the total debt as deficits plus accumulated surpluses.

Deficits require the Treasury to borrow money to raise cash needed to keep the Government operating. Money is borrowed by selling Treasury securities like T-bills, notes, bonds and savings bonds.

"We are putting our children in debt. It must be stopped." These are the vigorous words heard from politicians of all stripes when talking about the national debt and the budget deficit. The problem is that one person's pork is another's bacon - or possibly bread and butter.

In the not too distant past, there was a bitter contest over the Federal budget. It triggered a deep concern over the rocketing growth of our astronomical national debt. In the late '90's the news was filled with reports of the Titanic clashes between the Congress and President Clinton over the Federal budget. This fierce confrontation even resulted in the laughable-if-it-wasn't-so-sad shutdown of non-essential Federal services. Only bit of fast thinking at the helm combined with some legerdemain from Robert Rubin kept the U.S. financially afloat and saved us from the embarrassment and complications of international default on Federal debts.

We seem to have gotten complacent since then. Today over $1,000 in taxes per year must be collected for every man, woman and child in the United States simply to pay the interest on the national debt. All other Federal activities have a hard time competing with the line item for Federal debt service.

The public debt is currently growing at nearly a billion dollars a day! That is thousands of dollars per second! It's nearly inconceivable. Try blinking your eyes. There went $5,000-$10,000.

The Debt To The Penny
10/23/2003 
$6,846,423,952,526.25
10/20/2003 
$6,834,248,759,903.16
10/16/2003  
$6,830,709,313,106.40
10/14/2003  
$6,816,232,489,123.39
10/10/2003  
$6,815,997,835,664.82
   
Source: http://www.publicdebt.treas.gov/opd/opdpenny

It may seem as if the national debt is a nebulous topic with little impact on you, your family or your place of employment. You may have faith in the elected officials you have put into office to watch over just such issues. Many people feel that their one voice is too small to make any real difference. Not true. Here is an example of how it affects you: About 25 cents out of every dollar of total tax revenue collected is immediately wolfed down by the hideous interest on the Federal debt. You don't "get" anything for the first 25% of your tax assessment. Picture a teen gone wild with the family credit card. It's all fun and games until the family struggles to keep up with minimum payments and the interest that keeps growing like some monster from an old "B" movie.

A substantial amount of money simply vanishes from constructive use. It cannot be re-invested in the economy in any way. You certainly cannot invest it to secure your future. No company will experience the opportunity to grow and create jobs because of your investment. You cannot spend it and thereby directly stimulate the economy. Twenty-five percent of your tax assessment is jettisoned into the black hole of Federal debt service.

Some of your neighbors and even some multi-national companies or foreign governments can be recipients of these interest payments. They may put these funds back into our economy by purchasing goods and services. But for the most part, a substantial portion of the average American family income is evaporating under the hot sun of the interest on this "family debt".

And on this farm we have some pigs. Ee I Ee I Oh. Their names are Duplicative, Outdated, and Wasteful. We can pen them up and keep them from running wild and taking over the farm and the entire neighborhood. By getting these three unruly critters under control, we can reduce the Federal debt! When that happens, everybody wins. Our hope for a stable financial future for this country currently resides within Senate bill S. 837, introduced by Senator Sam Brownback, and subsequently in the House as H.R.3213 by Representative Todd Tiahrt. Based On the Base Realignment and Closure (BRAC) model, and known as the Commission on the Accountability and Review of Federal Agencies Act (CARFA), the bills have as their purpose: "to establish a commission to conduct a comprehensive review of federal agencies and programs and to recommend the elimination or realignment of duplicative, wasteful, or outdated functions..."

By forcing Congress to vote up-or-down on a commission's recommendations in their entirety, the congressional log-rolling that normally protects spending and waste can be short-circuited. Real reform can emerge, and the deficit and debt problems can be brought under control. S. 837 and H.R.3213 offer Congress and the Administration a viable political penning solution for the three pigs of the apocalypse.

Senator Brownback is working to get a vote on the bill for early next year. It would be great to see a sub-committee and a hearing soon -- before the November adjournment.

This is a project that deserves enthusiastic support. Co-sponsors to a bill are critically important to its passage. Senators Dole (R - NC), Bond (R - MO), Shelby (R - AL) and Coleman (R - MN) are likely to sign on when they realize how important CARFA is to the grassroots.

In the House, Congressman Burton (R - IN), Davis (R -VA), Schrock (R -VA), Ryun (R - KS), Pitts (R - PA) and DeLay (R -TX) wouldn't suffer from a little encouragement.

Every voice counts.

The national debt affects you in more ways than you may realize, and there is more that you can do about it than you may be giving yourself credit for. CARFA offers a reasonable first step to curb runaway Federal spending.

Jill S. Farrell is Director of Communications for the Free Congress Foundation.

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