Sue Lani Madsen: The national debt has a chokehold on freedom
We have a state budget, and if the Legislature does it right, everyone will be a little bit unhappy.
Legislative sources Friday morning reported the $1.1 billion budget stabilization account is untouched, but this year’s $400 million in extraordinary revenue growth will be used to increase education spending instead of going into the rainy day fund per the normal rules. Tax system changes will result in higher taxes for some, lower for others and more for the state. And there will still be a few sweeps of excess funds in what are supposed to be dedicated fund accounts, but with less impact than previous years.
Budget season reminds me of a movie catchphrase from the original version of “Fun with Dick and Jane,” starring George Segal and Jane Fonda. Upper-class father, mother, son and daughter are seated at the dinner table. The maid silently brings in the food. Dick has lost his cushy vice president job at an aerospace corporation and breaks the news to the family as the plates are delivered. He announces a few economies. No more French wine, no more ski lessons, they won’t heat the swimming pool. The kids groan. The maid snorts. Jane spritely says, “I’ll drop the Book of the Month Club.”
The camera cuts to the kitchen, where the maid pragmatically thumbs through the help wanted ads. Dropping ski lessons and subscriptions isn’t going to cut it. Dick and Jane continue to spend like they have it. Dick and Jane eventually decide bank robbery is a viable solution.
We approach state and federal budgeting like Dick and Jane. We keep spending money when we don’t have it. And that’s a collective we, because we’re the ones who put the pressure on our elected officials to protect our personal Book of the Month Club.
The U.S. Congress has treated the Social Security Trust Fund like an easily robbed bank since it began in 1935. Works for awhile, but eventually there are consequences.
According to the National Debt Clock, every citizen of the United States is carrying $61,364 in debt as of June 30. Every citizen of Washington carries an additional $12,467 in state debt for unfunded liabilities, the IOUs written to pensions and other dedicated accounts.
If you’re a classic family of four, it’s over a quarter-million dollars. If we stopped accumulating debt today, that’s still a hefty extra mortgage payment worth of debt for every family for the next 30 years.
In the 1980s, President Ronal Reagan said, “We don’t have a trillion-dollar debt because we haven’t taxed enough; we have a trillion-dollar debt because we spend too much.”
Thirty years later, we’re approaching $20 trillion in debt. The last time the national debt went down was under Presidents Calvin Coolidge and Herbert Hoover. Under Reagan, Social Security payroll taxes went up to pre-fund the baby boomer bulge, but the borrowing kept apace through the Clinton and Bush years. The debt inevitably accelerated its growth under President Barack Obama because nothing has changed except raised expectations for more federal health care spending.
We’re continuing to run up the credit card while making minimum payments. According to the Congressional Budget Office, the difference in economic impact between closing the gap with higher taxes or reduced spending are less significant than the unsustainable trajectory of federal debt growing faster than the economy. The CBO projected in its 2007 report that by 2029 our total revenues collected will only cover the interest. We’ll be totally debt financing our government. That’s not sustainable.
Fix the Debt, a bipartisan group of former legislators, governors and pragmatists, is blunt in their warnings: If we don’t control growing health care costs, including Medicare and Medicaid, we will have less to spend on investments in infrastructure and research for the next generation, and a broken safety net.
Every graduate facing a mountain of student loan debt understands how debt diminishes freedom. President Thomas Jefferson said, “The principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.”
If we truly want to live the pursuit of happiness on this Independence Day, we need to fix the debt.