Fixing the Economy--Steps to Take
The week before last we ended by laying out three steps that must be accomplished to fix the U.S. economy. Let’s start looking at them now.
First, we must match our current spending with our current income. This just means we need to balance the budget.
Balancing the budget is not enough. So second , we must pay down the debts that we have already accumulated. After all, we have a lot of debt already outstanding, somewhere north of $12 trillion (yes, that’s over twelve thousand billion). That debt must be paid down. Not paid off, just down to a reasonable level. What’s reasonable? Heck if I know. I’ll leave that for the economists to decide. Suffice it to say that not only are we not there yet, we’re heading in the wrong direction.
And once we get our debt down, the third step is to realistically project what our current generation will need in the future and save for it. If not, we’ll end up right back where we are now. This means that if the government has future liabilities, we should save now so that those liabilities that we promise today are saved for today. Otherwise we are making promises that we expect our kids to pay for.
Where does this leave us? Well, either our government’s income has to go up, or its expenses have to go down. Up to now I have not mentioned how we are going to balance the budget, pay off the debt, or save for future liabilities. That’s because I want to be loved, and what I’m about to tell you may cause our relationship to fall apart.
The United States has a certain standard of living that it can afford. We are living above that. We need to get down to that standard to balance the budget. We need to get below that to pay down our existing debts. We need to get further below that to save for our future liabilities.
To solve this country’s debt problems we must either stop spending as much as we are, or raise taxes to pay for the past, current, and future promised spending. Realistically, we will need to do some of both.
We live in a society where groups think they or others have a ‘right’ to certain products or services. For instance, we have determined that students in public universities have the right to pay less for an education than it costs to deliver that education. As such, the only way that those students can receive said education is to remove the ‘right’ that someone else has to their assets. This means that we tax folks who are not receiving the education to pay for the education of other folks.
I am not saying that this is right or wrong, just that it is. Most agree that the price is worth it. But worth it or not, any time you give someone an entitlement as such, you must take away from someone else. I am afraid that we’ve lost sight of this. And that causes us to spend money we would not otherwise.
Next week we will continue this and I’ll combine our three solutions.
PS: I’m actually in favor of education subsidies, and I’m willing to pay for them, so stop writing that nasty letter-to-the-editor.
This article was published under the title "Balance, planning key to fixing economy"
in the Wichita Falls Times Record News on August 22, 2010.
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