Debt Limit: Let The People Decide
by Randy Evans
J. Randolph Evans
Column No. 1077 (7/15/11)
The federal debt is over $14 TRILLION. How big is it?
$14 TRILLION.
To just count to $14 trillion, like 1, 2, 3, and so on, would take 448,000 years.
$14 TRILLION.
That is over $46,000 for every person in the United States (which is as much as the average person working actually makes in an entire year –
$46,326); for a family of four, it is $186,648 (which is over 2 times what the average family makes – $67,348).
$14 TRILLION.
If one dollar bills are laid end to end, $14 trillion would extend from the earth to the moon and back again 2,800 times or if just stacked, almost one million miles.
$14 TRILLION.
To pay it back in one year would require $38,356,164,383 (that is $38 BILLION+) per day; of course, that is not going to happen. To pay it back in 10 years would take $3,835,616,438 ($3 BILLION+) per day; that is not even going to happen.
$14 TRILLION.
That is $35 for every tree on the Earth (400 billion trees) – rather have the trees.
$14 TRILLION.
That is almost $36 for every star in the Milky Way – rather have the stars.
$14 TRILLION.
That is over $2,000 for every person on the planet (6.93 billion people.)
$14 TRILLION.
Bill Gates would have to pay his entire fortune ($54 billion) to the federal government and earn it again 259 times to pay it off.
$14 TRILLION.
It would take virtually the entire Gross Domestic Product (the value of everything produced in a year) of the United States ($14.119 trillion in 2009, which is estimated to be around $15 trillion in 2011) to pay it off.
$14 TRILLION.
In order to borrow that much money, a person would have to start borrowing $1 million per day, every day, for the next 38,356 years.
$14 TRILLION.
That is $1,806,451 for each wage earner in the United States (there are approximately 7,750,000 wage earners). At an annual average wage of $43,326, it would take 100% of their pay for over 41 years to pay their $1,806,451.
Get it? Biggggggggggggggggggggggggggggg problem!
So, has the United States borrowed enough?
Well, the folks in Washington, D.C. want to borrow more. Consider this: just the interest on this debt is now over $3.5 trillion or over $11,000 per person, and that number keeps growing.
So, the final countdown begins toward the day – August 2, 2011 – when the United States government reaches its debt limit. What happens if the Congress does not increase the debt limit? Then the government cannot borrow more money. So what is the problem with that?
Well, without more borrowed money (beyond the over $14 TRILLION it has already borrowed), the government will not have enough money to pay all of its bills. This does not mean the government will have no money. It still gets what it collects in taxes.
In fact, in August, the federal government will collect approximately $172 billion. The problem is that the federal government’s bills for August (money it has already spent) will be approximately $307 billion.
Imagine if your checkbook for August had only $172 in it when you are faced with $307 in bills to pay. Unfortunately, it is a problem millions of Americans face every day. They just solve it in a very different way.
A good start would be an austerity budget, with a diet of rice and beans for the foreseeable future. Every expense would be reviewed to see where costs could be cut or eliminated, and things not needed would be sold to help make ends meet.
Here is what the federal government faces in August expenditures. Salaries for active-duty military personnel are approximately $3 billion. Military support is approximately $32 billion. Social Security and Medicare payments total approximately $100 billion. Interest on the debt is approximately $30 billion. Unemployment benefits are approximately $13 billion. Just these items add up to $178 billion, i.e., more than the government’s total revenue for the month.
Then, there is everything else like courts, parks, etc. Get the picture?
Too much debt; not enough income – not a pretty picture. Now really, would anyone actually loan more money to this group without some serious changes to how they are doing business? Of course not. That is at the core of the debate raging in Washington, D.C. It is a real debate with real consequences.
Here is how Albert Einstein defined ‘insanity’: “doing the same thing over and over again and expecting different results.”
$14 TRILLION – INSANITY. Here is another idea – the debt limit can only be increased in the future by the American people. Borrow more money? It is time to try something different.
July 27th, 2011 at 10:26 am
Interesting proposal.
Even though I’m with Paul Krugman in thinking that we need to spend a lot more in stimulus now and cut later, after the economy recovers–which is the opposite of what the American people voted for last November–I think this referendum plan might have some merit. At the very least it would force the people to live with the consequences of their decisions. And avoiding consequences has been the core of the GOP’s appeal since Reagan. The GOP has been assuring people that they could have both low taxes and all the government that’s really important, and if it doesn’t work out then it must be the fault of Somebody Else–it certainly can’t be that the average American wants to have his low-tax cake and eat his high-services government, too.
On the other hand, the history of important referenda in California is not encouraging. In 2010 Californians voted BOTH to remove the 2/3 requirement for the legislature to pass a budget, AND to create a new 2/3 requirement for the legislature to raise taxes. They substituted one form of paralysis for another. Maybe the USA as a whole would be more sensible, or maybe not.
The most hopeful sign I see in this whole fiasco is the idea of a bipartisan commission whose package of recommendations would get a guaranteed vote, no filibuster, no amendments. This actually works with military base closings, which present the same core problem as the deficit: the “tragedy of the commons.”