(NNPA) It didn’t take long for us to get into this terrible state of debt. When Bill Clinton left the White House he was so proud that he left the nation with a surplus of funds. Here we are 11 years later with a debt that threatens our very existence as a nation. People this is a very serious matter and we all have to pay attention to it and resolve it. Instead of improving our state of affairs, Congress and the White House are posturing and, in fact, it is getting far worse. At the end of fiscal year 2008 (September 30, 2008) our debt was $5.8 trillion. At the end of fiscal year 2010, the United States had amassed over $9 trillion. We are expected to add another $1.5 trillion at the end of this year.
We don’t even have a budget to work with. This nation has not had a formal budget for the last two and one half years. It is irresponsible! We all have to pay our personal bills or risk going into financial ruin. The same applies for a nation. Our creditors expect to get paid and if we default the whole world will begin to withdraw any confidence in our word and wealth. The United States would become a pariah. There is much precedence. Remember the mighty Soviet Union? It fell not by war or revolution but because they became broke, which is where we are going if we do not get our fiscal business under control.
All it takes is discipline. Governor Mitch Daniels turned the fiscal state of Indiana for the better and he gave this simple explanation: “We spent less money than the money we received.” That sounds pretty simple, but the United States federal government is having a lot of trouble following that simple rule. The Congressional Budget Office estimates that tax revenue will rise from its current level to 18 percent of our Gross Domestic Product (GDP). That is a problem in that our federal spending will rise to 24 percent. Thus, we will be spending 3 percent more than we make. It is a definite disaster, if we maintain status quo.
What’s even worse is that we may exceed our legal debt limit level. In the past, we just ignored that law by simply increasing the debt limit. That doesn’t solve a thing but, in fact, worsens the situation. Come this August 2, 2011 we will exceed our debt limit. Imagine you going over your Visa or Master Card limit. The card would cut you off and may cease giving any more credit with you forever. The U.S. biggest creditors are China, Japan and Saudi Arabia. These countries have historically been not too friendly with the United States and it is unlikely that they will give us a “pass”, if we default on our debt limit. China has already warned us to get our act together.
Equally troubling is the tenuous state of our AAA credit rating. The big scorer of national credit ratings is Moody’s. Moody’s has already warned us twice to get our fiscal policy in order – have a balanced budget, a positive policy and don’t exceed your debt limit. Our ignoring the warnings is going to have dire effects. For the sake of our national security, will Washington, D.C. act in a responsible manner? Our precious future is on the line. At the rate, we are going within 10 years we will be spending $1 trillion or more per year, just to pay the interest on our national debt.
Raising taxes won’t do it. We already are the second highest nation in the world with corporate taxes which, in the end, are passed onto to us, the consumers. Income and corporate tax increases will kill more jobs and too many Black communities are already suffering from record level unemployment rates. That would only transfer the problem. The issue is to cut the outrageous spending levels that our federal government commits at an ever growing rate.
We should lift the age requirement for Social Security eligibility. The discussion has been going on for at least 30 years. Raise it already! Look at every federal agency and begin reducing the spending. Even for Defense? Especially for Defense! It is almost half of our total budget and is filled with the most unbelievable waste. We could save much without hurting our national security. Let’s run our treasury responsibly and then enjoy our AAA credit rating, and encourage our businesses to again invest in America. Our Fortune 500 companies are holding back trillions of dollars because of our fiscal uncertainty.
Yes America, we have a serious problem and like our great legacy let’s begin to deal with it. Our children, grandchildren and their children are depending on us. There is no more an option to ignore it.
Mr. Alford is the co-founder, President/CEO of the National Black Chamber of Commerce®. Website: www.nationalbcc.org. Email: firstname.lastname@example.org.
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