May 08, 2009

Even by Government Standards, This Is ‘Real Money’

By Dr. William Luckey *

This week, President Obama submitted his budget to Congress. The budget called for 3.6 trillion dollars in government spending; that’s $3,600,000,000,000. He was proud of his work because, he said, he cut $17 billion dollars in government programs, which he said is “real money.” Now, to you and me, $17 billion is a lot of money; but to the Federal budget, it is a real drop in the bucket. Obama’s cuts in programs are ½ of 1% of this budget, or, .005 of the budget. Put another way, the total spending in the Obama budget is $11,613 for every man, woman and child in the United States. The cuts in programs comes to $54.84 for every man, woman and child in the United States. To put this is real terms that everyone can understand, even a Congressman, the spending in government programs is less than one year’s tuition, room and board at Christendom College. The alleged savings of $54.84 will not buy even ONE standard micro-macroeconomics textbook, the price of which usually runs over $100.

Suppose we couple this with the FULL national debt. The national debt clock says that the regular national debt is $11.3 trillion dollars. The unfunded mandates from Social Security, Medicare and other entitlements, coupled with the official national debt, add up to more than $55 trillion dollars—CURRENTLY. How much of the $3.6 trillion dollars will the Federal Government be able to fund with taxes? The national debt after the 2010 fiscal year is expected to be over $12 trillion dollars (see The chart at the above site seems to show that the increase in the budget deficit will be more than $1 trillion dollars. For the sake of argument, let us assume a conservative $1 trillion increase in the national debt (ignoring an increase in entitlements). This will be an increase of $3,226 for every man, woman and child in the United States.

The current interest on the national debt, that is, the tax money we spend to holders of United States government bonds, many of which are held by China, to fund the government accumulated deficits, is $412 billion per year, and climbing. So the interest on the national debt part of the budget alone is $1,329 for every man, woman and child in the United States.

Josef Stalin said that the death of one man is a tragedy; the death of millions is a statistic. Of course, we are not speaking about death here, but do you really think that these numbers are merely statistics? Someone will have to pay for these debts. Every year the interest on the profligate spending of the Federal Government, which, by the way, you the voters, many of whom are Catholic, approve, grows. Suppose the interest you had to pay on your house and/or car grew in this way. How many extra jobs would you have to get to keep up with the payments? When you had no more time to work, then what? Would your whole family have to work, even the little kids? Would you be able to leave your wife and kids any inheritance? How much would you be able to give to charity?

If these trends continue, the ordinary people will have very little money to live beyond a very low standard. This will not happen necessarily in this generation, but what about your children and grandchildren? We are mortgaging their future so that we can be taken care of by a paternalistic government which is more than willing to exchange votes in the short term to ravage the wealth of the nation like a plague of locusts. Where is the outrage? Where even is the common sense? Where did our morality go, that we can stick our progeny with our debts?

Dr. William Luckey is the former chairman of the department of Political Science and Economics at Christendom College, where he is currently a professor.  He holds advanced degrees in Business, Economics, Political Philosophy and Systematic Theology. He was married in 1971, has four children and 12 (soon to be 13) grandchildren, and is a Lay Dominican.

You can visit his blog entitled Catholic Truths on Economics at:

* Catholic News Agency columns are opinion and do not necessarily express the perspective of the agency.


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