Fiscal Child Abuse
The battle against pervasive child abuse could not possibly deserve a higher national priority. But as our staggering national debt of $4.1 trillion mounts each year, an abusive economic dimension is added as well for our unborn offspring.
What an annoying form of fiscal child abuse, indeed. And it will exert a debilitating impact upon every aspect of their lives for countless generations to come.
Just a glance at the accompanying graph (courtesy of Economist Bryan Higgins of the Federal Reserve Bank of Kansas City) will convey how poorly the problem has been addressed throughout an unbroken string of years for nearly a century _ both in actual dollars and as a percent of our Gross Domestic Product.
This month's column will, therefore, focus upon three aspects of our embarrassing and malignant fiscal failure: Its dimensions. Its causes. The ultimate remedy.
Its Dimensions Our projected $5 trillion debt for fiscal 1995 already amounts to nearly 20 percent of the USA's total domestic public resources, estimated at about $25 trillion. While a going business might well sustain such a burden if its net revenues are sufficient to more than cover the annual interest expense _ not so for the USA, which racks up an annual deficit each fiscal year of almost a trillion dollars, amounting to a negative coverage of interest expense. Interest expense alone (see accompanying graph) amounts to roughly $200 billion or about 14 percent of our total current budget, and compounding alone will double it before the year 2000.
Its Causes Clearly, so-called "entitlements" constitute the largest element of the budget each year at nearly $350 billion, or about 25 percent of the total (not including social security). With the "defense" increment not far behind at just under $300 billion, or 21 percent. Our failure to begin to reduce _ or even balance _ our burgeoning deficits for so many years may well lie at the base of our national psyche. We're talking here about a handful of character flaws which now seem pretty well imbedded: security without work; leisure without discipline; pleasure without moderation; waste without responsibility; experiment without accountability; risk without common sense; and politics without conscience. How it all began, with each year feeding on the last, is no doubt a matter of a gradual and subtle dulling of our collective national conscience _ which leads to our third and final sub-topic. …