Something very strange is happening to me or maybe all that
gingko biloba I've been taking is finally kicking in. All I know
is that I can finally understand the difference between the
budget surplus and the national debt. Not only can I understand
it but I'm getting concerned that the American people are about
to be swindled.
If you're an accountant or an economic whiz kid then you've had
no problem with the razzle dazzle figures being thrown about by
the administration and certain members of Congress. I confess
that my eyes have always glazed over whenever the word budget is
mentioned and I've tended to switch off C-span whenever the
discussion is about fiscal issues. Recently, however, I've had
some sort of epiphany and the simple mind trick of transferring
the image of our government into an average Joe has made things
much clearer.
Whenever I heard my brilliant husband Vernon try to explain the
trillion-dollar national debt I completely tuned him out. Somehow
his explanations has sunk in and now I can understand what the
big deal is all about and I'd like to explain it to all my
similarly perplexed readers in the simplest possible terms. I
know you're out there because everyone I personally questioned
about the budget was as confused as I had been about this issue.
Imagine that the average Joe clears $2000 a month but his family
expenses amount to $4000. Since Joe has good credit, he uses his
credit card to make up the difference but Joe's budget is
operating on a monthly deficit of $2000. This goes on for years
and his debt grows and grows. Then one day, Joe gets a huge
promotion and now earns $6000 a month. He now has a monthly
budget surplus of $2000 a month but his total credit card debt
has risen to $50,000 with an interest rate of 20%. What do you
think is the wisest thing for Joe to do? The obvious answer is to
pay down his credit card bills and get out of debt while he still
has a good job.
Our government has operated at a deficit for many years and
instead of using credit cards, the government has been issuing
bonds, T-bills and borrowing from the Social Security trust fund
to meet its budget and has amassed a trillion-dollar debt. Now
thanks in part to a booming economy which has increased revenue,
the government has a budget surplus but the national debt is
still growing at an alarming rate. You'd never know it by the way
the administration is throwing out plans for 75 new programs to
spend this ``surplus''.
I hope your eyes haven't glazed over with boredom because it's
very important for the voter to understand what's going on in
Congress. There technically is no surplus. There can't be when
we're in so much debt. As of March 8, 1999 the national debt was
over 5 trillion, 623 billion plus dollars. Every citizen's share
is about $21,000. The national debt is growing at the rate of
about 275 million daily. So why is the Congressional majority
asking for tax cuts? Are they insane? Actually, it's not such a
crazy idea.
Imagine again the average Joe. He can use all of his $2000
monthly surplus to pay down his debt but if his debt were as huge
as our government's it wouldn't make much of a dent. If however,
he takes a portion of the surplus and invests it to grow his
income he might eventually eliminate the debt.
Tax cuts, believe it or not, can be an investment for the
government. These cuts stimulate the economy and end up
generating more revenue for the treasury. Putting the money back
in the pockets of the taxpayer increases their spending which
increases jobs and ultimately produces new taxpayers and revenue.
Economists may disagree but voodoo economics actually can work.
On the other hand, spending the surplus on new programs would be
the equivalent of Joe spending his surplus on more and more goods
and ignoring his bills. The president's state of the union
address was typical political posturing. Pump up the volume with
buzzwords like ``saving Social Security and Medicare'' and you've
got the audience in your pocket. Then let's spice it up by
promising government money to establish universal savings
accounts for every American. Yes, you heard right. Let's take the
taxpayers' money and give it to every American, including those
that do not pay taxes.
Clinton has also proposed taking over 60% of the ``surplus'' to
protect Social Security by investing a portion of it in the Stock
Market. Yipes!!! Isn't that a scary thought? The United States
government investing billions of our money and ultimately
influencing the Market. I'd also like to know exactly what
precautions have been taken to insure investments if there is a
run on T-bills caused by a Y2K panic?
In midtown Manhattan, there is a huge digital clock that keeps
track of our National Debt. The figures spin by with lightening
speed as the numbers climb higher and higher every second. It has
stopped only once. In 1995, the government shut down for 27 days
and couldn't spend our money so the numbers were blissfully
frozen.
I know I've oversimplified a very complex problem but we need to
move away from the juicy scandals and pay attention to what's
happening with our money. I think everybody has had enough of
parsing words and stretching the truth. I solemnly swear that the
next time a politician mentions the word surplus I will pay
closer attention and hold on to my wallet.