what will the future be?

Blessed are the young for they shall inherit the national debt.

Herbert Hoover

Let’s imagine you have kids. If you already have some then picture them in your head. Now, let’s use their social security numbers and names to take out a boat load of credit cards and then go on a spending spree, weeee! You’re living large and in charge and don’t give a second thought about the consequences because… well, it’s not your problem, it’s your kids problem! Ha ha, suckers!

 

How does that make you feel?

 

Welcome to our national debt reality. No politician wants to face the monster in the room because they know what has to be done but no one is willing to do it. Our national debt is now up to $19.8 Trillion and growing every day while congress keeps raising the debt ceiling. Is this the legacy we want to leave our children, a mountain of debt due to Washington’s mismanagement of our taxes? Both Republicans and Democrats need to come together and end this run-away train. Or, we could just do nothing and let our kids deal with it.

 

One of the reasons to pay down the national debt is to insure that what you paid into a government fund will still be there when you need it, like Social Security. Congress has been borrowing from our funds and not putting it back, they’ve been very naughty. It’s time to end the borrowing and start rebuilding the accounts so people who depend on these funds will have them. Click the link below to read more why we need to reduce our debt.

 

Here’s a look at our National Debt broken up into its parts:

Publicly Held Debt:

Treasury Bills: $1,715,829m (0.9% IR)

Treasury Notes: $8,751,868m (1.8%  IR)

Treasury Bonds: $1,918,661m (4.3% IR)

TIPS: $1,261,486m (0.8% IR)

Treasury Floating Rate Notes: $341,128m (1.2% IR)

Nonmarketable Securities: $377,214m (2.3% IR)

Total: $14,366,186,000,000

Interest Expense:

Public Debt: $222,350m

Intragovernmental Debt: $122,376m

Total: $344,726,000,000

Public VS Government Debt

Public debt is all federal debt held by individuals, corporations, state or local governments, Federal Reserve Banks, foreign governments, and other entities outside the United States Government less Federal Financing Bank securities. While intragovernmental debt is incurred when the government borrows from federal trust funds to help fund current operations.

Intragovernmental Held Debt:

SSA – Federal Old-Age and Survivors Insurance: $2,845,621m

OPM – Civil Service Retirement and Disability Fund: $767,392m

DOD – Military Retirement Fund: $665,545m

DOD – Medicare-Eligible Retiree Health Care Fund: $226,647m

HHS – Federal Hospital Insurance Trust Fund: $204,497m

HHS – Federal Supplementary Medical Insurance: $78,586m

FDIC – Deposit Insurance Fund: $78,021m

SSA – Federal Disability Insurance Trust Fund: $66,114m

DOL – Unemployment Trust Fund: $59,899m

DOT – Highway Trust Fund: $58,604m

DOE – Nuclear Waste Disposal Fund: $52,952m

OPM – Postal Service Retiree Health Benefits Fund: $46,662m

OPM – Employees Life Insurance Fund: $45,267m

HUD – FHA, Mutual Mortgage Insurance Account: $28,404m

DOL – Pension Benefit Guaranty Corporation: $26,308m

OPM – Employees Health Benefits Fund: $25,711m

Treasury – Exchange Stabilization Fund: $22,061m

DOS – Foreign Service Retirement and Disability Fund: $18,712m

HUD – Mortgage-Backed Securities Account: $14,511m

DOT – Airport and Airway Trust Fund: $13,744m

NCUA – National Credit Union Share Insurance Fund: $13,090m

USPS – Postal Service Fund: $10,171

Other – Programs and Funds: $98,392m

Total: $5,466,911,000,000

How to right the debt Ship

We need to immediately address the Intragovernmental debt and pay back what was borrowed. People have been paying into many of these funds over the course of their careers and the funds need to be there when they retire or need assistance. Then, we can address paying down the high interest rate (IR) public debt items in order to reduce interest payments. Here are steps we can take to make this happen.

 

Step One: Independent Audit of every Governmental Department

We need independent agencies to audit the federal government and its affiliates, like the Federal Reserve Bank, and find redundancies and wasteful spending. Then, put an end to the shenanigans that got us here. Following that process, a routine auditing program and eliminating the ability to borrow from funds needs to be implemented to insure we never slide back into the red.

 

Step Two: Corporate Taxation on Gross Income

Business owners and their accountants have been playing the game of “hide the profits” for far too long. It’s time to end the games and get back to supporting the nation with proper corporate taxation. That is why I believe we need to tax corporations on their gross income, just like how employees are taxed. This will help equalize the cost burden of the government and provide the funds to pay down the outstanding debt.

 

Step Three: Simplify and Automate Government Processes

The industrial revolution was due to innovation and the willingness to change manufacturing processes. We need the same revolution regarding governmental programs and its interface with the people. I’d like to see it set up much like a Google account, where you have one master account that cross populates over all relevant departments for that person. This will help reduce government labor costs and allow people to have more control over their interactions with the government.

We must not let our rulers load us with perpetual debt.

Thomas Jefferson

What a budget could look like

Here’s an example of a budget that uses the 2015 median employee tax rate of 12.77% for corporations. In 2015, corporations had a median tax rate of 4.68%, which is much lower than what employee’s paid. I don’t have the data to generate a variable rate for corporations, so we’ll just use the the employee tax rate for now. By equalizing the taxation, we can pay down the debt, afford Universal Healthcare, Public College and school lunches for k12. It would also increase funding for transportation, energy and environment which would increase job growth. This budget does cut military spending and would force the US to focus on national security and withdraw from foreign engagements, which tend to perpetuate hatred of our nation. We’ve been in constant war for over 16 years, it’s time to bring our troops home and focus on fixing our own country.