From: gross@eric10.rtp.dg.com (Gene Gross)
Subject: Re: [X] -- Put 10% of my Taxes to Paying on the National Debt.
Date: Wed, 26 Aug 92 13:47:34 GMT
Organization: Data General Corporation, RTP, NC.

In article <01GNTTBS9IC0002O0Q@utarlg.uta.edu> B645ZAW@UTARLG.UTA.EDU (Stephen Tice) writes:
>`10%' ???  What the Heck?
>
>We already paid = 14% = of each '91 tax-dollar for National Debt.
>
>And as best I recall, that's also been bumped up higher for 
>'92 tax-dollars as well. 

I hate to tell you this, but Congress has not spent one red penny on
reducing the actual debt.  They have only paid the interest on the debt.
Further, at the rate the debt is growing, even if Congress immediately
imposed a freeze on all spending and taxed us at 50 percent of income,
we still couldn't pay off the debt for another 10 years minimum.

The most pessimistic scenarios I've seen say that we will be unable to
pay the interest on the debt by 1996.  Others say our troubles will come
around the year 2000 (give or take a couple of years).

Congress has done some "creative" bookkeeping (something that would the
rest of us in jail).  They have "on budget items" and "off budget
items."  Based on the "On Budget," we owe over $4 trillion dollars.
This represents money that Congress has borrowed to pay for the
shortfalls between revenues and expenditures.  We pay a nominal rate of
8 percent on this money.  However, to get a better picture of what we
really owe as a nation, we have to include the "Off Budget" liabilities,
mostly in the form of entitlement programs.  This "off Budget" debt
includes Social Security funds.

To digress a moment, Congress has taken all of the money in the Social
Security fund and replaced it with an IOU.  Someday that IOU will be
called.  The problem is that the amount of the IOU is so great, the
government can't pay it.

Now back to the story -- if we add in the Off Budget debt, we have a
grand total of nearly $13 trillion dollars of debt.

That paltry 10 percent won't cover anything -- and if the big spenders
in government can figure out how to get their hands on it, they will!

Frankly, I've toyed with the idea of somehow hitching up pay to debt!
Something to give Congress and the Executive plenty of motivation to
reduce the debt.  But they would never go for it.

When the point comes that we can no longer even cover the interest
payment, the President and Congress have three choices, as I see it:

1.  Default on the debt and simply say we aren't going to pay it.

2.  Raise taxes on everyone to 50 percent of their income and cut
spending across the board by no less than 40 percent.

3.  Monetized the debt.

I seriously doubt that number one will be the course of action.  And I
see no willingness on the part of Congress or any of the Presidential
candidates to implement number two.  That leaves number three -- the
choice of every nation that has ever faced this situation before.

At that point, I would also expect that Congress and the President will
figure out a way to attach all private retirement funds, all
investments, and all savings accounts to help pay off a portion of the
debt before printing enough money to cover the interest payment, and
thereby, monetizing the debt.

All this talk of which candidate will be best for the country begins to
pale when one looks at the actual troubles the lie ahead of us.  Neither
Bush nor Clinton will be able to get us out of this one.  It has been
growing through all of the administrations since Roosevelt's time to
now.  That is historical fact not merely supposition.  This problem is
the fault of both parties and a citizenry that has steadfastly refused
to educate itself and force their elected representatives to act
responsibly on all accounts.

America is about to get what it deserves.  And our children, their
children, and their children, will probably curse us every day of their
lives as they struggle under a burden we can't even begin to imagine.

Gene

Xref: sparky talk.politics.misc:43118 ca.politics:7316