Article in Economics / Political Economy
This is a chapter from my book, a memoir entitled "A Fork in the Road: A Story of Blindness, Trials, and Inspiration."
 
 
 

The rich rules over the poor, and the borrower becomes the lenders slave (Proverbs 22:7)

In a worst-case scenario, train wrecks can also threaten countries, just as the mountain of debt is threatening the future of the United States today. When I was born in 1957, the United States had a national debt of 275 billion dollars. By 1980 the national debt was about 1 trillion dollars. Today it has risen to 14 trillion dollars, which is equal to our annual Gross Domestic Product in 2009. While I know the comparison is a little different, if the income of a household was equal to the debt of same, the household would be in serious financial trouble.

Both the Republicans and the Democrats have contributed to the problem since 1981. Under President Reagan, our national debt increased by 1.6 trillion dollars. Under President George H. W. Bush, our national debt increased by 1.4 trillion dollars. Under President Bill Clinton, our national debt rose by 1.6 trillion dollars. Under President George W. Bush, our national debt increased by 4.4 trillion dollars. Given the depths of our current recession, national debt under president Obama has risen by 3.5 trillion, and it will continue even higher than that as we move forward.

Today our 14 trillion dollar national debt costs us 414 billion dollars in interest or 18 percent of the total federal budget. Currently interest rates are at historical lows with the current 10 year US Treasury bill earning less than 3 percent annual interest. Over the past ten years, ten year treasury bills have average a 5% annual interest rate. If our ten year treasury bill rises to a 4 percent annual interest rate, our interest payments on our 14 trillion dollar debt will increase to 560 billion dollars, which is 18.6 percent of the total 2010 federal budget. If interest rates rise to 5 percent annual interest, interest payments on the 14 trillion dollar federal debt will increase to 700 billion dollars per year which is 23.3 percent of the total 2010 federal budget, and so on and so forth. If our bond rating is reduced from AAA to AA we will have to pay an additional 0.25% percent interest to attract creditors to buy our national debt, which means that we will have to pay and additional 100 billion dollars in interest per year at current levels.

We have lived on a national credit card for the last two generations, and the bill is now coming due. While they may disagree on the seriousness of the debt, or how we are going to pay it down, most Americans agree that our national debt has now grown into a serious problem. While it will not be easy, we need to deal with it now.

Americans sacrifice everyday for their families. With few exceptions, every American loves his or her country, and the state within which they live. We are now staring at the top of the cliff. If we do not change the way that we do business we will go over the cliff and create a disaster from which our children and grandchildren will have to recover. There is not a single parent or grandparent that wants to burden the next generations with our mountain of debt.

If we do not act now, we will hit the top of the cliff and tumble over into the abyss below, which in turn, will cause substantial destruction. Our children and grandchildren will be burdened with annual interest payments for our debt, which means that revenue will be diverted from other good ideas. Our debtors may be less willing to purchase our debt, which would increase interest rates, which would increase inflation. Our credit worthiness as a nation may be downgraded, which in turn will require us to raise interest rates to attract money from our creditors. Ultimately, we may face deflation, stagnation, or a sharp rise in inflation, depending on circumstances yet to come. US dominance in the world will decline further, since we can no longer afford to deploy our military and other resources everywhere. Our currency may be devalued, which means that everyone will become poor. We will have fewer resources with which to confront a national emergency or to make substantial shifts in our priorities since we would lack the resources or the credit to do so. Storm clouds may gather, which they often do when a country fails to deal with major problems. Our enemies may join together in the darkness because the United States has become a weaker country, and they may seek an opportunity to strike us at a moment of weakness. Our debts to foreigners will affect and limit the freedom of our foreign policy. We will be less able to meet the present or pending shortfalls in the funding of social security, Medicare, or Medicaid. We may lack the necessary resources to combat global warming or deal with the immigration problem and a host of other issues.

Most Americans will be happy to sacrifice for their country, but the call for sacrifice is best when it is made in a bipartisan fashion. While we live in a partisan country, we should listen better to the other side. While I have always been a Watergate Democrat, I have always listened to the Republican message because I know that the support of the business community is important to providing jobs. While I voted for President Obama in 2008, I have always admired his opponent, Republican Senator John McCain, for his service to our country. I have even thought about the ideas of the new Tea Party and I find that some of the positions expressed by Sarah Palin have become more balanced and meaningful, since it is clear to me that she has grown since the 2008 election. I have even come to like John Boehner, who is the new Speaker of the House, for the tightness and conciseness of his arguments and the crispness of his conclusions, much less the slight smile that I hear when he is finished talking. You do not have to agree with everything that someone says to appreciate them and their positions. Do not get me started about Vice President Joe Biden and his character, experience, love of his country, etc because I could go on and on and on. There are good and patriotic Americans on both sides of the isle.

We have done this before. It is all in our history. Look at how our country pulled together after Pearl Harbor and fought World War II. My dad always told me that “we” was more powerful than “I”, and my dad was a Republican. We have faced more desperate times. But when we pull together, we still can accomplish almost anything. My mom always said to just tell the truth because the American people could take it, and she was a Democrat. The size of our national debt today is a clear and present danger to the future of our country. We must act together, we must act boldly, and we must act sooner rather than later. A century ago, someone said, “a house divided against itself cannot stand.” Hmm. Another Republican. You might know his name.

 

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Craig B. Brown
Judge Craig Brown is the fourth blind District Court judge in the history of North Carolina. After serving almost twelve years on the Distri

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