Both Oars In One nation in debt

Apr 26, 2011

At first, I was a bit hesitant about adding to the deficit/budget debate.  But, that was before President Obama decided to discuss the issue on Facebook with its CEO, Mark Zuckerberg, as the host.  I was especially inspired to write by the President’s claim of victory for getting the usually t-shirt clad, multi-billionaire gossip facilitator to wear a jacket and tie. 

Mission accomplished, Chief!

By being underwhelmed by Mr. Obama’s choice of venue and moderator, I don’t mean to imply that young people don’t have a place in this debate. In fact, they have the bigger stake since today’s deficit is tomorrow’s debt.   Still, I am a bit put-off by the deficit being discussed on the same platform that hosts Miley Cyrus’ fan club.

Really, Mr. President…? A social network with a 20-something moderator was your best choice?  What’s next? Selling T-Bills on eBay?

For me, the deficit is too scary and serious for Facebook.  If the President wants to present the deficit through a popular medium, he should ask John Carpenter to help him create a new horror movie.  He can call it “The Debt that Swallowed a Nation” and air it on the SyFy channel. 

Seriously, it would be helpful for the President to present the deficit as a debt creating monster that we need to kill before it kills us. This depiction is not an exaggeration.  The deficit is headed to the record level of 1.5 trillion dollars and our national debt is already at its highest level relative to GDP since WW II.  

We need to face the facts. If the national debt is allowed to grow unchecked, it will eventually swallow everything in its path - much like the blob. It is true that Japan has a much higher debt-to-GDP ratio than us, but they also seem to have an uncanny way of being able to kill Godzilla over and over. (However, the recent decline in Japan’s personal savings rate, much like the one that preceded our economic crisis, may dull the great Samurai warrior’s monster slaying sword.)      

The trick is how do we kill the monstrous deficit without simultaneously killing our slowly recovering economy.  The best way is to starve and poison it at the same time—both work in horror flicks. If an upturn in prosperity gives us a hand by pulling the rug out from under the monster’s feet, that’s great. But, we cannot hope that the sun coming out will kill this monster by itself. 

The poison for a killing a deficit monster is very expensive. It can only be purchased with higher taxes. No politician is keen on making this point clear.  But, if we are serious about killing this monster without damping our recovery, we all need to put more money in the pot.

To be fair, a debt tax, like a war tax, should be a tax we all participate in equally.  Until the deficit is tamed and our national debt paid off, there needs to be a flat, unavoidable income tax taken directly from all earned for this purpose.

To starve the monster, we need to  cut ephemeral government spending. Ephemeral spending is anything that does not build capacity, infrastructure or national competitiveness. We can only afford the social and soft developmental programs that we are willing to support by paying taxes. It is wrong to spend future generations’ money to ease our pain today or feed special interests, aka pork barrel politics.   

The President is right to preach moderation given the possibility of slipping back into recession.  But, he verges on bullying and hatemongering when he uses Facebook to taunt the opposition by saying, "The Republican budget put forward is fairly radical, but I would not call it courageous…I would call it short-sighted."  He is even more out of line when accuses the Republicans of wanting to solve the current budget problems on “the backs” of the poor.  Maybe, Grandma Robinson needs to monitor his Facebook usage.