Monday, April 04, 2016

The Burden of Debt

Vasu Reddy from Chicago

With more than 16 Trillion dollars (only god knows how many zeros in a Trillion) in national debt and growing at jet speed ($56,378.00 per person) as of last week, USA as a nation is by far the biggest borrower on Earth.  It is perhaps no other nation has even the capacity to borrow that much money.  In 2015 USA spent over $430 billion on just the interest payment which is approximately $3500.00 per tax payer.  The interest rate was a very modest 2.5% annual rate on this money.

The debt is greater than the annual GDP of the United States, and the debt stood at 102.98% of GDP when last calculated.

The USA as the largest economy on earth and the most prosperous nation on the planet, to be in such a dire financial stage is nothing but political mismanagement.

The nation keeps raising the debt ceiling (with a bit of drama in congress every time) at alarming rates and the elected officials (every one of them) play politics that cater to the next election cycle, spending borrowed money.  The social programs and freebies are excellent vote bank politics, as no one is really interested in hearing about the debt burden, and having a plan to live within the means.

This election cycle has raised the topic of the national debt as a main issue.  Trump has and continues to make it a major issue (which it should be).

Should we be afraid of burden of debt, now and in the future?
Why is it difficult for the USA to cut the debt, and also pay it completely off?
Why is the government spending money it doesn’t have while demanding people to pay taxes and managing their finances?

Millions of voters following Trump and now voting for him are certainly looking for someone to get elected and make the hard choices on reducing or even eliminating the national debt.  Trump being personally wealthy and without the normal compulsions of money in politics, can suggest or even make policy announcements that offer across the board cuts to spending, cutting deficits, and return the stable balance sheet to the people.

USA is quite aggressive in is quite aggressive in tax collection.  IRS keeps lifelong tabs on both individuals and corporations, in tax collections.  Why should the government be allowed to excesses and abuse?  Shouldn’t the agencies that manage national finances be subjected to same budget constraints as individuals and corporations?

Trump clearly makes a case for deficit reduction (in fact he suggests to eliminate it all together) thru revised trade agreements, negotiating better government contracts, and cutting waste.  He promises to completely erase the budget deficit in 8 years.  That is a plan to cut the deficit by 12.5% a year for 8 years to completely erase the   deficit.  It is by far a very aggressive suggestion any the people behind him are supportive of this and every other idea he has socialized in this election.  Is such a plan possible?  In true sense, if the nation wants to live debt free, yes.  Erase the budget deficit, and enact laws that will forever force the government to be debt free.

Trump wants to renegotiate just about everything.  He also wants other nations to pay their fair share for American services and military protection.  There should be no debate on asking nation's to pay their fair share, and help with the costs.  If an individual negotiates and a business negotiates a better deal (all the time), then why not the nation?

No one running for elected office wanted to take on the markets, international partners, immigrants, women and serious national issues and still be standing in the race.  No matter what Trump says, a third of the voters have continued to support him, and if he gets into the general election as the republican candidate his support might be greater.

From now until we choose the next president, Trump has raised issues that politicians stay away from.  America First and also embracing wholesale changes to keep the nation as the most prosperous on earth is something all presidents should do.  Cutting government and its spending, immigration, trade and alliances, all should be of importance, but first keeping the nation first and its people.  All of Trump’s stump speeches (not highlighting his insults) are things that are of major concern to every American.   All of us have the issues in our mind, and now Trump is making them headlines.  No matter who become the next president, the issues of the nation and Trumps supporters (a 1/3 of the nation) and probably all that don’t support Trump are all waiting for actions that lead to the nation’s fiscal discipline?

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