In a fascinating, simple, yet brutal accounting of where and what the debt is, Stephen Squibb breaks down the where, the to whom, the why, and the reality of the nation’s debt, and in particular the absurdity of attacking Social Security and Medicare, which are savings programs. Note the emphasis added in the third paragraph.
Letting one dollar equal a trillion, the total debt of the US Government is roughly $14.27. This divides into $8.32 of public debt, which is held by other nations, individuals, and institutions, and $5.95 of intragovernmental debt, which is owed to programs like Social Security and Medicare, and to the Federal Reserve.
Of the $8.32 of public debt, $4.47 is owed to other countries: $1.15 to China, $0.91 to Japan, $0.36 to the UK, roughly $0.20 each to oil exporters and Brazil, and $1.70 to the rest of the world. $0.63 is due to mutual funds, $0.61 to private pension plans, and $0.31 to depositors like commercial banks, credit institutions, and credit unions. Insurance companies hold $0.25 and savings bonds and state pensions $.018 each, while individuals, brokers and dealers, bank personal trusts and estates, corporate and non-corporate businesses, and other investors are due $1.21.
Intra-governmental debt is something of a misnomer: $4.53 of it is really money owed by the government to the American people. The biggest single number in sight, $2.40, represents what Americans have collectively set aside for retirement, or Social Security. This $2.40 is a surplus, collected over decades, as the total revenues from Social Security payroll taxes have exceeded the total amount being paid to beneficiaries. This surplus has been invested in the government, where it counts towards the total debt. The psychological impact of this language game should be clear. What ought to be celebrated as sound financial planning appears instead as further evidence of reckless profligacy. The more money we save, the poorer we are told we are. There is also $1.68 in savings for health care and $0.40 dedicated to needs such as highways, housing, the disposal of nuclear waste, and unemployment insurance.
Short and well worth the read.
At this point even the New York Times seems to coming around to reality.
The boasts of Congressional Republicans about their cost-cutting victories are ringing hollow to some well-known economists, financial analysts and corporate leaders, including some Republicans, who are expressing increasing alarm over Washington’s new austerity and antitax orthodoxy.
Their critiques have grown sharper since last week, when President Obama signed his deficit reduction deal with Republicans and, a few days later, when Standard & Poor’s downgraded the credit rating of the United States.
But even before that, macroeconomists and private sector forecasters were warning that the direction in which the new House Republican majority had pushed the White House and Congress this year — for immediate spending cuts, no further stimulus measures and no tax increases, ever — was wrong for addressing the nation’s two main ills, a weak economy now and projections of unsustainably high federal debt in coming years.
Instead, these critics say, Washington should be focusing on stimulating the economy in the near term to induce people to spend money and create jobs, while settling on a long-term plan for spending cuts and tax increases to take effect only after the economy recovers.
But Republicans in Congress and on the presidential campaign trail refuse to back down.
Economists disagree about the proper balance between spending cuts and tax increases in reducing a government’s debts. Some studies by both liberal and conservative economists suggest that emphasizing spending cuts is better for long-term growth. But there are few if any precedents for paying down such a large debt solely through spending cuts.
Now is not the time to rip the federal budget to shreds. And never is the time to cut Social Security and Medicare and Medicaid.
Now is the time to expire the Bush tax cuts on the super wealthy immediately.
Now is the time to get our troops out of Afghanistan and Iraq as fast as possible, and that means within six months, as far as we are concerned.
Now is the time to throw the criminals in the banking and mortgage and hedge fund industries in jail for their crimes, and to quit secretly continuing to slip them federal tax dollars to prop their failures up and conceal their crimes.
Now is the time to strictly regulate these industries to prevent future crimes.
Now is the time to tax corporations fairly, and stop their concealment of massive profits off shore to avoid taxation.
Now is the time to end corporate welfare.
Now is the time to tax income above 106,000 and 180,000 magic levels for Social Security and Medicare. That alone will make Social Security solvent even beyond the late 2030’s, and help stabilize Medicare.
Now is the time to pass single payer Medicare for all, with negotiated drug prices that are not outrageous theft by the drug industry, and with cost controls imposed to prevent the outrageous and criminal increases in costs of medical care that the private insurance and medical delivery system has let run rampant.
Now is the time for the Federal Government to come up with the almost $3 trillion dollars that it is estimated we need to spend starting right now to repair the roads, bridges, waterways, and water delivery system of this nation. Our national physical infrastructure is decaying, and waving magic wands will not fix it. We need a massive program which will provide jobs repairing and updating the infrastructure of America. It simply cannot be put off any longer. Not do do so insures America’s current slide towards third world status, a decline that seems to be accelerating every day.
The Republicans, and especially the insane members of the so-called Tea Party, seem intent on destroying this nation. They were willing to let the debt default, and possible trigger another great depression. They are terrorists. They do not care about the vast majority of Americans. They care only for their masters: the corporate plutocratic oligarchy that is trying to seize control of this nation through their ownership of Congress and its members.
The real tragedy is that what they pronounce as a cure for the economy, would in fact be its death knell.
Rep. Todd Young, IN-09, Sen. Richard Lugar (IN), Sen. Dan Coats (IN), Pres. Barack Obama, Sen. Harry Reid, Rep. Nancy Pelosi, Rep. John Boehner, Rep. Eric Cantor