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Some more about the National Debt

August 14, 2018

The previous blog indicated that the national debt is complex and confusing and that no one is doing anything about it. Well, it is also overwhelming for those that really think about it. So, maybe it is better to do nothing..… Well, that might work if the problem would eventually go away; but I do not believe this is not one of those “eventualities.”

There are some move moving parts that I want to add to my last blog:

  1. Our dysfunctional Congress periodically plays political chicken by holding votes on approving the debt limits. There is no logic to withholding approval since every penny spent was preapproved by Congress. If they had concerns about increasing the debt limit, they should have not voted for the spending instead of approving it. Not permitting the increase in the debt limit because of their prior vote to increase it is totally illogical, mean spirited and likely a self-aggrandizing grandstanding charade. This tête-á-tête is referred to as the fiscal cliff.
  2. There are previously legislated debt increases that are not being addressed in any manner. One of these is the deficit that will be caused by the complete depletion of the Social Security “trust fund” in 2034. This will occur because the annual of Social Security outgoes became greater than its revenues in 2010. When taking into account interest received by the trust fund, an actual reduction of the trust fund will occur for the first time this year. Starting in 2034 the excess outgoes will then be added to our national debt if nothing is done. A comment here is that this was a major issue during the Bush – Gore campaign in 2000. However, NOTHING has been done about this from 2000 through today. Does this mean we were being kidded with a fallacious campaign issue; or maybe we are the brunt of a massive “kid” of incompetence inaction and ignorance?
  3. There is a similar issue with Medicare.

It is human nature to not want to deal with overwhelming problems that will not occur in the foreseeable future. It is easy to ignore and figure that someone else will deal with it when it becomes a real problem. This is like ignoring a very small ceiling leak until the ceiling is about to cave in, or rather, actually caves in. Note that the “foreseeable future” differs for different groups of people. For me 2034 is far away and not a concern; for the government it is not so far off that it should be totally ignored. Actually, based on a government’s life span and considering phase in periods, 2034 in this situation is just around the corner.

It seems to me that the people we elect to represent us in governing the country need to consider all of major issues. To me, that includes those far on the horizon that are highly likely to occur. And I consider the rising debt and the root causes in the highly likely category.

The above are my opinions only and in no way expresses the views of my firm or anyone else. Again I want to thank Anthony Imbesi for his studious research. Ed Mendlowitz.

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