Jon De Vos " That voodoo that you do
May 7, 2009
The National Debt stands right around $11 trillion. I’m not sure if National Debt should be capitalized or not, but anything that big, like Frankenstein, assumes a life of its own and commands a lot of respect.
In fact, the National Debt is so ponderous, it’s actually become fun to ponder. It is 67 miles from Winter Park to Denver, which is, coincidentally, the exact height of the stack of $1,000 bills Ronald Reagan would have had to have to pay the National Debt in 1981. Today that same stack of $1,000 bills would be over 629 miles high, representing about $36,000 for every man, woman and child in the United States. We could stop illegal immigration in its tracks if we just handed them an invoice as they stepped across the border.
1835 was the year the Liberty Bell cracked. That was also the first, last, and only time, the United States ever paid its obligations in full. President Andrew Jackson signed the check, burned the mortgage and said, “Let us commemorate the payment of the public debt as an event that gives us increased power as a nation and reflects luster on our Federal Union.” The very next year, the very same president was unable to pay the very same National Debt.
So our current bill has been accumulating interest for 174 years. No wonder the amount defies comprehension. If you had tucked $1,000 away at 5 percent over that same period, you would now be worth about $4.8 million. The current debt defies comprehension. There is no way we can ever pay that bill.
The nation ran out of cash a long time ago. Last March, Congress set the National Debt ceiling at $9 trillion, despite the fact that the National Debt already exceeded $11 trillion. The knee-jerk response has been to loot Social Security, federal pensions, and Medicare funds to cover the shortfall, but these funds are already short by more than $4 trillion.
So, how come the U.S. Government (there are those capital letters again) doesn’t just declare bankruptcy, send out apology notes and get on with life? The main beneficiaries of the National Debt are the American people themselves whose funded entitlements have in no small way created this phenomenal obligation. The money is tied up in savings bonds, Treasury bills, and federal securities, not to mention social programs, national parks, farm subsidies, homeland security, and home loan guarantees, to name just a few obligations.
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Why don’t we just print more money? It’s dangerous and has caused huge problems for nations in the past. To satisfy the reparation demands of the Treaty of Versailles in 1919, Germany tried just that. Inflation quickly rose into double digits. It’s possible they could have pulled out of it but in 1929, the world-wide depression caused a total financial collapse. There are those who say the rise of Hitler and ultimately World War II were related to the German bankruptcy and the subsequent inflation it caused. The safest thing is to balance the budget and not increase the debt further.
And maybe we’ll all get ponies for our birthday, too!
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