The Facts?
Bloomberg News published a couple of new surveys just yesterday, at least it was when I started writing this. And I quote;
A 62% majority believe the deficit is getting bigger, 28% believe the deficit is staying roughly the same, and only 6% believe the deficit is shrinking.
In other words, in the midst of a major national debate over America’s finances, 90% of Americans are wrong about the one basic detail that probably matters most in the conversation, while only 6% — 6%! — are correct.
For the record, last year, over President Obama’s first four years, the deficit shrunk by about $300 billion. This year, the deficit is projected to be about $600 billion smaller than when the president took office. We are, in reality, currently seeing the fastest deficit reduction in several generations.
And yet, 90% of Americans don’t believe the demonstrable, incontrovertible, entirely objective truth. It’s worth pondering why.
End Quote.
Now before you just automatically disagree and start the blame game and the name calling, I checked several different sites, tried to get polling from different sources, from the left and the right, and I believe this poll is close, if not 100% accurate. Also I checked several different sites trying to see if the deficit is actually shrinking, I could find no one who could say otherwise. I did find some differing on how they calculated the deficit, which brings me back to my premise that figures don’t lie but liars can figure! However they all agree that the deficit is coming down at a rate that has increased in the last four years. Now, what we need to decide, did the people they pole understand the question. I say they did not. Now I do believe that the deficit reduction is increasing under President Obama. I am not saying it is his genius that is behind it. We are winding down some pretty expensive wars and other factors which can’t help but help in deficit reduction. But let us now consider whether any of the opinion polls are accurate when you ask about the deficit. I say no, hell no, as a matter of fact! Most people I talk to automatically assume when I talk about the deficit that I am talking about the national debt. They do not understand the difference. So when you ask them whether they think the deficit is shrinking, and it is, but they answer no, they are not wrong. Why? Because they think they are giving an answer about the national debt, which is not shrinking. We have been increasing the national debt by about two trillion dollars the last few years. So the answer they think we are asking is in fact, correct. So if pollsters do not explain the difference between the deficit and the debt, the poll will be totally skewed and incorrect. So lets review what the difference actually is;
The deficit is when, for example, when we as a nation spend 800 billion more to operate than revenue we accumulate in a designated year, than your deficit is 800 billion. But the national debt is a culmination of all the years we have been in deficit, thus for example, our debt was about 16 trillion last year, so if the deficit had been 800 billion than our total debt would be 16 trillion 800 billion plus or minus a nest egg or two. So yes the deficit is decreasing, but as long as it is a deficit our debt continues to climb. So what we have to do is not spend more than available revenue, plus a profit to even start to lower the debt. Got a few hundred years? This is just the cherry on top of the huge cake everyone is trying to slice up.
When you tackle the deficit, and eventually the debt, you have to make some pretty hard decisions. First you have to use common sense, and look at things with a level head and sharp eye.
I am going to start with a simple tax reform. Did I say simple, well I should amend that to say simple in theory, but in reality, with the current climate of the political party system and its ever-present lobbyists employed by big business and banking, well it is almost an insurmountable process. I maintain that every American who gets paid, regardless of how that pay is distributed to him, pays the exact same percent of that pay with no loopholes, no deferments, and no excuses! However when you talk about how companies and corporations will pay their share, this is when it gets difficult. When companies go public and sell stock for profit and or borrow money on how much their stock is worth, well this can become a very complex business again, exactly what we were trying to avoid. So we would have to change how big business operates, and since big business controls politics, in my humble opinion, we are looking at a huge bump in the road to such tax reform. I believe if you could either go to a flat percent, or a flat fee for every person and get rid of the stock scheme altogether, then companies would have to revert to concentrating on making a product that is superior to the competition in order to make the company successful! Instead they manipulate profit and stocks with the bottom line being the cheapest product with quick and fast profits for stockholders and company officers that collect huge bonuses for making it happen. So, just to prove I am not a know it all, I do not have the experience to lay out a total plan that envelopes all aspects of wage earner to corporate giant and those it is beholden to. I am stating that we need to do it different. But in saying that I realize that big business is vital to the health of our nation. So it has to have a prize at the end for an entrepreneur to strive for, a business to aspire to, a conglomerate to want to be, here in America, and not overseas where labor and taxes are less expensive. The main reason I think this is something we need to strive for is simple however. All you have to do is count heads to know how much average Joe is going to kick into the coffers. Companies would know exactly how much of their profit is going to go to taxes, which allows them to know the bottom line, exactly. This will be hard on lawyers, who by the way absolutely hate this idea. So look at it this way, they are sharks and we are, well lets face it shark food in that we feed their greed. So who cares if they are removed from the equation! I discussed this with a friend who in the past has sent me books and articles dealing with economics. He likes the idea, but pointed out how hard it would be to buck the existing system I just described. I wish I had answers instead of just a wish, but I am hoping to get people to start thinking about how we got into this mess, more than once, and worse every time. It has always been greed by corporations and banks, making the fast buck instead of the wise one. Getting theirs and getting out! So we have to invent a better way, a more stable way. I don’t believe anything I have proposed is impossible, or that it impedes competition or entrepreneurial endeavor. Plus it is you and I, every time, that winds up paying for what a few manipulate into being. We pay for it as services are lost to us. We pay for it in lost education for our young; we pay for it in lives when the services we lost are police, fire, and emergency response teams. Most importantly for this discussion, we pay for it in taxes that are not used wisely, but wind up building a bridge to nowhere, studying the sex life of theTsetse fly, or bucking up foreign powers that would like to see us dead if the truth be known.
So the deficit needs not only to continue to decline, it must cease to exist before we can even start to pay down the trillions we owe. That debt is also costing us plenty in interest. I tried to find out just how much, but nobody seems to be talking. I am sure of one thing, Japan, China, and the rest are not just giving money to us without expecting a payday with huge profits. It will hit us right in the gut sooner than later, I am afraid.
I would love to mention other important things that affect how all this is going to work. Things like Social Security, Medicare, and education. I know my audience however and know I tend to go on and on and you have read further than I have a right to expect. But one last thing, something I cannot let go of, social security should not be listed as an entitlement. It pays for itself. It was robbed time and time again to pay for the shortcomings of those in office. Now they don’t want to even admit there is an excess of 2.7 trillion dollars in non-marketable securities that have come due and are owed to the social security fund. Baby Boomers are not the cause. They are drawing at a higher percentage, sure, but they also paid in at the same higher percent all along. Not only do you and I pay every time we get a paycheck, but your employer has to also pay into it for you every time he does payroll. So it pisses me off that they expect me to eat dog food so they don’t have to pay back what they took while I paid in since I was twelve and so did every employer I ever worked for. I don’t have an answer for the other programs, but if the politicians were forbidden to touch the fund, it does not affect the deficit or the debt. It just means we are broke, and who better to pay for it then those of us who cannot afford high priced lobbyists or power brokers to speak for us. So you have to use your pen, your computer, your vote, and your voice, and you need to start yesterday, as it is fast becoming to late!
The Love Chronicles 
A great job pointing out the difference between the National Debt, and the Deficit. People should read this with an open mind, ready to learn, not with the bit held between the teeth, just waiting to lash out against those who have a different agenda. Notice I said agenda, not opinion, because opinions are open to discussion while agendas are not. To “NOT” have an open mind is to buy into the Political Party System where winning for your Party is everything while America and all Americans often are the one’s to pay the price.
I also agree that tax reform is paramount for America’s future. Over the years the Political Parties in buying votes from we, the guiles less Americans expecting only the best from those we send to Washington, have created a multi-headed monster too complex to understand, too massive to fight, and too feared and hated by all. We buy insurance for our future welfare, and to protect us from loss, and that is what taxes should be viewed as, with our country, the agent guaranteeing our future welfare, and protecting us from loss. Basically, taxes should be viewed as a way of pooling our money in order to create a society safe from foreign invasion, while maintaining an infrastructure that allows it’s citizens the ability for attaining and maintaining the ability to enjoy life, to relish in it’s liberties, and to be able to pursue individual happiness. Instead, we have created a system in which we seek to avoid paying instead of happily investing in our future. A flat tax would be a great way of attaining this although as John has pointed out, it is not as easy to accomplish, as it is to envision.
On a side note, I recently embraced the epiphany that it takes a certain amount of chaos to open windows of prosperity. I realize that nothing lasts forever, and in order for America to enjoy a growing, healthy economy people must be allowed to discover the future. No individual or group of individuals has perfect information, or knows everything. To expect the few to be able to predict with accuracy what future invention or innovation will be the next big thing to explode our economy is ludicrous. Who knows what the next “better” mousetrap will be. To manipulate the economy is to create economic bubbles that bring short-term success only to make the fall that much more difficult. And to manipulate the fix, is to tie up the very resources that if allowed free rein would bring about success painlessly. President Reagan had it right when he embraced deregulation in order to end stagflation, and that is the history we need to learn from, not the misunderstanding that the massive spending required by WWII is what brought us out of the Great Depression. It was the austerity on the home front, and the unleashing of America’s Industrial Might that prevailed. However, as John has oft championed, complete freedom has a risk that would allow the corruption of greed to also flourish possibly leaving a barren landscape instead of a lush garden, thus again, what is easy to envision is not easy to accomplish. But some people think I am opinionated.
Just saying, and hoping that you are now thinking….
You have an accurate grasp of debt/deficit. I assume maybe just the two of us know that to muddy the picture we just have to explain fiat and how the privately owned Federal Bank is reaping great rewards from us, including manipulating the fiat money.