On Jan. 8, 1835, all the big political names in Washington gathered to celebrate what President Andrew Jackson had just accomplished. A senator rose to make the big announcement: “Gentlemen … the national debt … is PAID.”
After the revolution, the founding fathers debated whether or not to just wipe clean all those financial promises made during the war.
This was debt owed in large part to hardworking Americans.. Our representative government found defaulting on its citizens unacceptable, so the U.S. agreed early on to consolidate the debts of all the states — $75 million. Six years later they had paid all our debts in full, and the government actually ran a surplus.
Slowly over the years, the United States government steadily amassed debt, deceptively slowly. We knew there would be debt in times of war, but it was never out of hand. However in the past three decades the rate of acceleration of debt has been alarming.
It began for the most part during the Reagan Era.
Reagan inherited the mess that Jimmy Carter created. Reaganomics—Reagan’s policy was to lower the tax rates to spur investment by the private sector, and increase government spending in real investment areas in order to shore up certain areas of the economy, particularly the military.
Reaganomics was capitalism, and it created one of the most robust American economies in history. Reagan knew that if you grow the economy, you can eliminate debt.
Unfortunately Reagan not only inherited Carter’s economy—that was fixable. He also inherited Carter’s Congress. These tax and spend liberals are the reason America is in the situation it is in today.
During the Reagan Era, the size of the debt grew from just under $1T with $250B of that held by the Fed to $2.9T with $677B held by the Fed.
Keep in mind that Reagan was paying extremely high interest rates on his money, as nobody cared to fake the interest rate of inflation—the real interest rate—as we are doing today to protect Obama.
But my point is this. We know where it began. We can argue “why” we built so much debt, but the problem is obvious, and has been since the 80’s.
So now the government has the taste of blood. It knows that it can run huge deficits with few ramifications. If the people don’t mind that the government disregards rules like the “pay as you go” legislation, then why should government stop spending.
Self-imposed “band-aids on bullet holes” solutions like sequestration are fraudulent attempts by the government to act as if it is going to rein in spending. Yet, government cries like a spoiled child the minute these automatic triggers kick in.
We are approaching the problem of debt from the wrong point of view.
Politicians have convinced us that it’s a bad thing to shut down government. Today we hear that 800,000 government workers will be furloughed. Well too bad. What would a regular corporation do, during hard times?
The rules of life and good finance don’t apply to government. None of us would amass debt to the level of the Fed, nor would we be allowed to deficit spend as they do. The private sector has checks and balances that don’t allow for this. Even with our government credit being lowered almost to that of a Third World nation, it continues to spend.
Worse yet, our government is a counterfeiter. You and I cannot print money to solve our debt problems, but our government does. How do you get into such massive debt, and have the ability to print money? At least a counterfeiter would have the decency to PAY HIS BILLS! After all, isn’t that what printing money is all about?
The reason Obama and politicians like him don’t care about debt is it’s the American people’s debt. But unlike our principled forefathers, these shakedown artists have no intention of paying back the money.
I say shut down the government. It’s LONG overdue. Shutting down the government should be something politicians aspire to do, when government goes as rogue as ours has. It’s time to show Washington DC that they money-grab is over, and the American people are serious about limiting government.