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See the shining city crumble. And there's not a cent to fix it.

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I-95 in Philly shut down due to bridge cracks; just the tip of an iceberg.  

Just because you have not yet spent the money does not mean you will not have to.

 

“Deferred maintenance” can be thought of as maintenance you should have done, but, for whatever reason, have not. The failure to replace termite infested framing in your home doesn’t mean the walls will forever remain upright. The failure only means that you have deferred — procrastinated — getting to a task that when the time arrives that you simply no longer have a choice, when the walls have actually begun to crumble, it’s going to be many times more expensive, or you’ll have to vacate the property.

 

You say you haven’t the money now. Do you think you’ll have the money later? How can you be sure?

 

The federal budget is nothing more than a best-guess plan. It’s an estimate of the sums that will likely be expended versus the revenues available to meet the forecasted outgo. If the realized expenses turn out to be greater, or if the revenues are less than hoped for, or if both occur, you’re operating at a “deficit.” The only options available then are to cut expenses, increase revenues, or borrow the difference, or some combination of the three. Whether it’s you, or if it’s the federal government, it’s all the same principle.

 

When Vice-president Cheney exclaimed, “Reagan proved that deficits don’t matter,” Veep couldn’t have been more wrong. Bush 41 and Clinton were forced to struggle with the debt that Ronald Reagan had piled up. After five years, Clinton began to get it under control. When Bush 43 took office the accumulated debt was just shy of $5 trillion. Today, it’s racing upward of $9.4 trillion. For some idea how quickly, take a gander at the whirring dollar-o-meter at http://zfacts.com/p/461.html.

 

To most of us, these numbers are so vast they have little to no genuine meaning. Our thousands-of-dollars minds just cannot synthesize quantities like that. This is an effort to bring it all home, and to relate what’s been going on, especially as it concerns Iraq; an effort that has been 100% on borrowed money. The effort is to make it possible for everyone to become so alarmed he and she will honestly care.

 

Currently, the US has suffered somewhere in the neighborhood of 4,000 military war dead and 60,000 or more mutilated. (I use “mutilated” because “wounded” is simply too sanitized to suit me.)

 

Honest, however, I don’t think many give much of a damn about the dead and mutilated. Not really. They tsk, tsk, shake their heads, then go back to the worries that intimately impact their daily lives. Unless they know someone who has died or been mutilated in the effort, they don’t care all that much. They may say they do, but I won’t believe them. It’s just not in human nature to.

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So let’s get to the nitty-gritty that they absolutely will care about; not perhaps now, but will: the money end.

 

Tragically, it’s very much like an interest-only subprime mortgage: Ya say, “Yeah, I can afford that.” So you make the deal, not thinking about the fine print in the deal that’s going to eventually crush you. I’m talking now about the downstream costs that were illustrated recently by Nobel Laureate Joseph Stiglitz. He postulated his total estimated costs of Iraq, $3 trillion were very likely “conservative,” that the actual realized costs for the 50+ years of care and disability payments we have morally contracted to owe our maimed and mutilated vets will approach or exceed $5 trillion!

 

It did not start with the Bush administration; the smoke and mirrors budget game. It’s been going on for at least the last 40: inappropriately including, as part of the Revenue side of the ledger, wage-earners’ Social Security deposits. By doing this in 2006, the Bush budget claimed the interest payments on the national debt composed only 8% of the pie. (http://www.fms.treas.gov/mts/index.html  and http://www.whitehouse.gov/omb/budget/fy2007/) The truth of the matter was and is the portion is 20%; $406 billion, mostly INTEREST ONLY! It was and remains the third-largest annual federal expense!

 

Of the $9.4 trillion owed, $5.6 is held by the US public, $3.8 trillion, or an entire 40%, is held by foreigners and foreign governments. By the time President Bush leaves office the debt will be at or closing in fast on $10 trillion, a doubling in a mere eight years! Interest-bearing debt, the payments of which buy none of us a thing!    

 

Those payments are fixed expenses. Other than paying more annually than is required, nothing whatsoever the US can do will lessen them. Default is not an option.

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To make it easier to grasp, how the spot we’re in is foreboding, let’s suppose your own budget reflects $80,000 of annual outgo from $100,000 income. Easy to see you’ve got a nice $20,000 cushion. ¡No problemo! Not so long as that $100,000, the result of you and your life partner’s full-time employment, is not suspended because one of you get injured or lose your job, and aren’t able to find an equivalent replacement. On a national scale, national recessions and depressions are akin to one of you losing your income. And that’s how a 20% part of the pie could, in a serious economic downturn, become 25%, or 30%.

 

But wait! There are other social contracts we’ve made that cannot be amended either, regardless of economic circumstances; Social Security payments to those eligible to receive them, Medicare, Medicaid — presently 54% of the White House concocted budget. Doesn’t matter, though. All the sums that have been borrowed from the Social Security Trust fund have been dumped into the sum that is the national debt.

 

Of every tax dollar that is calculated as the total of the budget, as of FY 2007, when, according to Bush and his supporters, supposedly times were great, only 18¢ was available for discretionary spending; education, infrastructure, etc. Review the paragraph, the second one prior to this. My bet is that that 18¢ has shrunk considerably. What do you think?

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An "Old Army Vet" and liberal, qua liberal, with a passion for open inquiry in a neverending quest for truth unpoisoned by religious superstitions. Per Voltaire: "He who can lead you to believe an absurdity can lead you to commit an atrocity."

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