The U.S. National Debt: On the Addiction of Living Beyond One's Means

Twelve times a thousand times a billion  Such a number can only be known abstractly to the human mind.  A person is not apt to see 12 trillion widgets and thus fully realize how many that number signifies. Just in an abstract sense, however, the number can be understood represent debt that is beyond sustainability.   If not, then exactly how much signifies the threshold over which any additional debt will never be paid back? The U.S. federal debt stands at $12 billion as 2009 is drawing to a close.  If this amount is difficult for us to contemplate, how realistic is it that the debt will ever be paid off? that the debt has been growing since the late 1990s may mean that the question of paying off the federal debt might never be seriously entertained. 

In December, 2009, The New York Times reported, “With the national debt now topping $12 trillion, the White House estimates that the government’s tab for servicing the debt will exceed $700 billion a year in 2019, up from $202 billion this year, even if annual budget deficits shrink drastically. Other forecasters say the figure could be much higher. In concrete terms, an additional $500 billion a year in interest expense would total more than the combined federal budgets this year for education, energy, homeland security and the wars in Iraq and Afghanistan.”[1] As much as the interest expense is expected to be (and the implied difficulty in paying down the debt, let alone covering its interest expense, it may be even harder before long.  Again, according to The New York Times, “Americans now have to climb out of two deep holes: as debt-loaded consumers, whose personal wealth sank along with housing and stock prices; and as taxpayers, whose government debt has almost doubled in the last two years alone, just as costs tied to benefits for retiring baby boomers are set to explode.”[2]

While the deficit-spending is perfectly understandable in the context of a financial crisis and otherwise likely economic depression, such spending has hardly been saved for such times.  In fact, it has been part of “normal” US Government budgeting.  What the newspaper doesn’t mention is that even in the late 1990’s when the government was running surpluses and the economy was booming, only part of the surfeit was used to reduce the government’s debt.  At the time, Bill Clinton’s administration used the “rationale” that the boom that had been going on since the mid-1980s would go on for another fifteen years from the late 90’s.   Even had that forecast been realistic, I’m not sure that all of the government surpluses together could have eliminated the public debt.

In any case, fiscally the US Government has been out of balance for decades.   What might be the cause?  Two candidates come readily to mind.  The American culture is a rather self-consumption-oriented society wherein spending beyond one’s means is not a matter of moral disapprobation.  In other words, the problem may boil down to a “gimme, gimme, gimme” mentality—a lack of maturity, really.  Secondly (and relatedly), representative democracy itself may itself favor spending over taxation to cover it.  

Any normative constraint that might operate at the individual level may not exist at the institutional level where representatives are effectively rewarded for bringing home the bacon and punished for raising taxes.  Although it could be argued that the representatives should be more responsible nonetheless (as their goal ought not be simply to be reelected), we can point to ourselves, the American citizens, as the force behind the unsustainable fiscal situation.  We don’t have to endure incumbants who have spent in deficits, but we do.  The US House incumbancy rate almost guarantees that once someone is elected, he or she can be virtually assured of being re-elected in two years, und so weiter.    

The problem, in other words, lies within us.  Too few of us value self-discipline in ourselves.  We are unwilling to call other people on their profligate credit-card spending, and we refuse to vote out of office those representatives who have voted outside of a financial crisis for an unbalanced budget.  Consider how different a people we would be were to insist at the ballot box that our representatives actually make a contribution to paying down some of the debt (again, not during a financial crisis) each year during their terms.  

How different we would be if we held our officials accountable for more than scandal.   How different we would be if we “just said no” to the credit card companies and went without the plastic (using debit cards that could be used only on positive balances and having a savings account for emergencies).  If we look at the US Government as unsustainable, what we are really saying is that we, ourselves, are fundamentally flawed as concerning being adults.  The problem, in other words, transcends finance and politics.  We are living beyond our means.

1. Edmund L. Andrews, "Wave of Debt Payments Facing U.S. Government," The New York Times, November 22, 2009.

2. Ibid.

Integrity in the Job-Description of a US Senator: On the Role of the Senate's Design and Purposes

Micheal Bennet, who represented Colorado as a U.S. Senator, told a journalist in 2009 that the possibility of losing his seat  in 2010 should not hold him back from voting for health-care reform even if it were unpopular in Colorado.   The journalist, of CNN, asked, "If you get to the final point and you are a critical vote for health care reform, and every piece of evidence tells you, if you support that bill, you will lose your job, would you cast the vote and lose your job?" Bennet replied, "Yes."[1] Voting in line with the best interests of his fellow citizens would evince a degree of political integrity that I suspect few in the biz have today. However, might a representative be wrong and his or her constituents right about the long term best interest? Is a U.S. senator necessarily smarter or more capable of insight? Lest Bennet be criticized here for failing to have represented his constituents, one might take a look back at Madison’s Notes to the constitutional convention for guidance. 

The complete essay is at Essays on Two Federal Empires.

1. Josh Gerstein, "Bennet Willing to Sacrifice Seat over Health Vote," Politico, November 11, 2009. 

Twenty years after the Berlin Wall fell: Vor zwanzige Jahre ist die Mauer gefallen

It was a gray rainy Monday in Berlin, yet the sun was shining for those in Europe who are celebrating the fall of the iron curtain.   Twenty years ago from that day, it would have seemed surreal to the east Germans who could suddenly simply walk across a border without fear of being shot.  People simply walked through.  “I just wanted to set foot on your side,” one man said.  “Can I cross over there and visit my parents?” a woman asked.  The east German police could only say, “go ahead.”  There would be no criminal penalties.  Before long, people climbed the wall and started chiseling away.  “The wall has to go,” they cried, “Sie ist zu Ende.”

A state the size of Montana in the EU, the united Germany is today a positive force in Europe.  The fears that gave rise to the European Coal and Steel Cooperative are no longer extant.  To be sure, the existence of the EU renders Germany less a potential threat to its neighbors.  However, Germany is playing a far more positive role in European politics than simply being contained.  In fact, Germany is among the states that have been most supportive of the EU, both monetarily and in terms of supporting further political integration.

   

The lessons of war are not lost on the descendents of those Germans who lost two wars in the twentieth century. The lesson is: a federal union in Europe is the best chance to obviate future war.  The seventeenth century alone demonstrates just how much strife can occupy a century. The problem is perhaps how to give the European Union enough power to prevent war while not giving the union so much power that it can tyrannize over what is innately a heterogenious empire-scale continent. The United States face the same problem, though that union is much closer to the consolidation end than to dissolution.   As much as Europeans may fear consolidation, justifiably looking at American history as evincing such a trajectory, I believe that the illusion that the EU is simply an alliance (in spite of having a supreme court, parliament, and executive branch) ought to be feared just as much.   The former east Germans ought to know the decadence in propaganda.   To be sure, the denial in the US of the empire-level consolidation is just as dangerous.  Both refusals to come to terms with how each of these unions has changed is like refusing to remove one’s blinders before driving.   

In both federal unions, a realistic assessment is requisite to reforming the governance structures to achieve a balance of power between the respective federal governments and the respective state governments.  Common action, such as to forestall war and regulate interstate commerce, and cultural and ideological distinctiveness can each be accommodated; in fact, each can serve as a check on the other, such that neither one can snuff out the other.   Surely one of the lessons learned by the east Germans was that concentrations of power ought to be suspect, given human nature.