Our Nation's Credit Card

In yesterday's New York Times, amidst all of the hoopla over sex scandals, appeared a critique of what I think is the broadest and most frightening problem our nation faces--and it's one we've created ourselves (and exacerbated in the past 6 years, after we'd begun to ameliorate it in the late 1990s). 

In its (totally free to view) editorial Deeper and Deeper the New York Times points out that as the Fed has raised interest rates this year, the interest our nation pays on its national debt is also rising, from $184b in 2005 to $220b this year.  Put another way, the balance on our national credit card is incurring finance charges of around $730 a year for every man, woman, and child in the country  It's slated to go up to around $900 per person by 2008.  Keep in mind, this is merely the annual interest on our national debt, saying nothing about the principal.  If your family ran up a credit card balance that meant you were paying that much interest per year (and with no mortgage deduction or equity built up to make it more worthwhile), you sense something wrong.  You'd probably feel guilty about it, ashamed, worried that the moral sensibilities of our society would brand you prodigal or dissolute, and concerned the bankruptcy might loom in your family's future. 

Not the Bush adminstration, though.  It is full of excuses.  There are two ways to pay down a ballooning debt: cut spending (like on the war in Iraq or on pork-barrel legislation) and raise taxes.  I think we should do both, but the Republican party, which has had sole control of both houses of Congress for all but 18 months of the last 6 years, can't do either.  I've heard people call Republicans the "Daddy Party" because it supposedly provides strong leadership--but the dad they resemble most is Homer Simpson, who is wont to do things like blow the family's savings on fancy, pointless toys.  It would be nice if the "Daddy Party" ever bothered to balance the checkbook--but apparently only the "Mommy Party" is imbued with enough responsibility to actually try and pay down the nation's credit card.

Comments

[Greg]

Dan,

The Republicans have been unmasked as the party of fiscal responsibility. Clearly they are dominated by tax-cuts-at-all-costs thinking today. There are a few "old" Republican moderates who believe in resonsibility before tax-cuts, but they are rare these days.

In truth, only resoration of the paygo rules in the senate will really work. Both parties fail on willpower alone. A bipartisan compromise that sets out the rules of the game are the only way to go.

The Republicans abandoned the paygo rules, claiming that the current emergency made the rules too restrictive. There will always be some "emergency" that will suggest suspending common sense rules.

In thinking that our times are unique in their urgent nature, we leave our children to their own problems and our debt.

Sadly, it seems that a crisis (or Ross Perot) is necessary to prompt action.