Many folks are up in arms about the excesses of big government, but very few people seem to care about the excesses of big corporations like the Wall Street investment banks. Some Wall Street banks still are too big to manage, too big to regulate, too big to fail and their CEOs seem to be too powerful to go to jail.
The excesses of Wall Street were largely responsible for the Great Recession of 2008-09, from which our economy has not recovered. A case in point: J.P. Morgan Chase recently reached an agreement with the U.S. Department of Justice to pay a $13 billion penalty for the sale of fraudulent mortgage-backed securities. J.P. Morgan Chase and the other big Wall Street banks have the potential for causing another major financial meltdown. There also is a real possibility that the extremists in Congress will create an economic crisis again next year by shutting down the government or refusing to pay our nation’s just debts. Will they repeat their folly?
The issue that should concern us the most is the continuing high unemployment rate. Currently, there are 11.3 million unemployed – three applicants for every job opening. The youth (age 16-24) unemployment rate in July 2013, was 16.3 percet. The top priority of Congress should be to pass legislation that would put people to work so they can contribute to society, buy things and pay taxes.
Having said that, here are some little-known facts about the national debt.
First, the budget deficit is shrinking; the national debt is starting to decline and now stands at about 75 percent of the gross domestic product – or GDP.
Second, roughly 40 percent of the total debt, in the form of savings bonds, Treasury bills and other U.S. Government securities, is owned by individual investors, banks, insurance companies and retirement funds in the U.S. About one-third of the U.S. debt is owned by people and institutions in foreign countries; China owns 8 percent of the total U.S. debt. The remaining one-fourth of the debt is held by various parts of the U.S. government itself.
Third, the U.S. has been a debtor nation during most of its history. The federal government was in debt from the very beginning, when it assumed the debts that the states incurred during the Revolutionary War. Nevertheless, our economy has continued to grow, and the American people have continued to prosper. The relationship between the national debt and economic growth is much more complicated than some pundits in the media would have us believe.
Fourth, the federal bureaucracy has actually been decreasing.
In 1978, the total federal workforce (civilian and military) was 5,028,000. In 2011, the total federal workforce (civilian and military) was 4,403,000. From 1978 to 2011, the U.S. population grew by 89 million, or 40 percent; during the same period, the number of federal employees decreased by 20 percent. Today, there are 600,000 less federal employees than there were in 1962.
Federal spending priorities have sometimes been referred to as choosing between guns and butter. For a variety of reasons, Congress has had a hard time deciding what is necessary and what is wasteful. The federal budget is huge and complex. In fiscal year 2011, the overall federal budget was $3.64 trillion. The main expenditures were: military/defense $728 billion – 2 wars equals $172 billion – 20 percent; Social Security – $720 billion – 20 percent; Medicare $491 billion – 13 percent; Medicaid and the Children’s Health Insurance Program – $297 billion – 8 percent; unemployment benefits and other safety net programs $360 billion – 10 percent, and interest on the debt $247 billion – 7 percent. Cuts in federal spending often mean eliminating jobs or withdrawing aid for needy people. Which items should be cut, and how fast?
Because people have encountered problems signing up for health insurance on the internet, Tea Party Republicans have escalated their attacks on the Affordable Care Act – also known as Obamacare.
The computer glitches will be fixed. Obamacare is essentially the same as the 1989 plan developed by the Heritage Foundation, a conservative think-tank. It is also the same plan that Governor Mitt Romney signed into law in Massachusetts. It utilizes private health care providers and private insurance companies to make health insurance affordable for those with lower incomes. That’s why the Republicans have no alternative: Obamacare was their plan, until it was adopted by President Obama. We should give it a chance.
Anthony J. DiStefano spent 29 years in state and federal government, including working with the Ohio General Assembly, the U.S. House of Representatives and two executive agencies of the federal government.
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