Opinion, Pro/Con

CON: Propose realistic solutions for deficit

student campaign is raising awareness of the national government debt. However, with budgets and the debt, students can easily be overwhelmed by large, scary numbers. As such, a bit of context is helpful. First, Congress doesn’t cover all its spending (and rarely ever has). The cumulative debt owed by the federal government is a whopping $18 trillion. But does debt actually affect everyday life?

Honestly, federal debt is one of the safest long-term investments, so the interest rate that bonds traders get on debt is a signal for all kinds of investments – like business loans and home mortgages. If there’s so much debt that investors think the government might not pay it all back, then those investors will demand more interest. This reverberates through the entire economy. All kinds of investments get “crowded out,” and everyone goes broke as a result.

Pretty bad. But is that happening? There are some governments, like Greece, whose investors have no confidence and demand huge interest to cover their risks. Fortunately, our interest rate is right around a healthy two percent, and has been for a few years. With inflation, that the expected rise in prices is two percent in a healthy economy means the government might make up what it loses in interests through a bigger economy and more taxes.

There’s little threat of our debt ruining the economy today. If you were a risk-averse investor, where would you go? The European Union is on life support, Japan has been stuck for 20 years and the mighty Chinese are scared of independent bloggers. The prices of gold and oil have crashed, and you always know that there will be the US Government.

Is the debt getting worse? It’s true that we do run a deficit every year. For all the talk of “trillion dollar deficits,” spending rose sharply and taxes plummeted only in 2008. It was this small thing called the “recession.” Since then, the deficit has decreased by two thirds and is below some pre-recession levels already.

But assume debt is a big problem in the long run, and we ought to do something, disregarding how inaccurate most long-run projections are. What action steps to take? As “Diamond” Joe Biden put it, “Show me your budget, and I’ll tell you what you value.”

Do we assume that Congress would willingly cut the military or raise taxes? If you think so, have you ever seen Congress?

Do we cut healthcare and welfare for the poor and elderly? Despite the fact that wages still haven’t recovered from the 2008 recession, and millions remain unemployed?

Do we try to cut the remaining “discretionary” budget that makes up 17 percent of spending? The environment, transportation, education, arts, science, research, law enforcement and more?

We deserve a smart debate about policy. If college students can’t have one, then no one can. But relying on large numbers and platitudes about “awareness” is disingenuous to our student body as future taxpayers and citizens.

See also: Ryan Durga’s PRO piece on the national debt.

Patrick Quinlan is a junior majoring in international studies and political science.

February 21, 2015

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Patrick Quinlan


2 COMMENTS ON THIS POST To “CON: Propose realistic solutions for deficit”

  1. Patrick Quinlan says:

    Hey buddy, I appreciate taking the time to read through the piece and consider a contrary opinion! But there might be some points where we could straighten things out.

    You’re right, assuming low interest rates forever is irresponsible. But the market (and the fed) offer signals for when rates rise, and both primarily seem to be focused on the strength of consumer demand and confidence, not the spending habits of congress. My point that there’s little investor doubt about the governments ability (if not desire) to pay its debts still stands, and the gov’t has a debt/GDP ratio that’s a lot lower than most rich countries. The credit downgrade, on the other hand, was given as a response for the uncompromising and illogical posturing that congressmen take when thinking about spending and debt (as S&P said themselves in August 2011). Fortunately, it hasn’t actually seriously affected those interest rates (which both you and I would agree are low, at least for now).

    My question is how does government debt, or even that lower credit rating, actually affect hard-working Americans, dish-washers, pool-cleaners, and business owners? I have in fact considered that connection, and tried to explain it in this piece. This isn’t to say that I’m an expert in policy, and I would be happy to hear your or other reader’s thoughts on the mechanisms by which things affect other things.

    Please don’t consider a light-hearted tone as insinuation against employees and workers and citizens. At the same time, you shouldn’t consider yourself free to make accusations about my life. My hometown of Miami has been devastated, almost more than any city in the country, by the housing collapse, and it’s an industry I’ve known familiarly. Regardless of personal experience, rest assured that my judgement of policy is deeply pro-america and pro-economic growth. The last bit of this piece, where I tied spending priorities and the actual working class families that get hurt when people cut government for no reason, should be some reflection of this.

    I’m outraged at “very serious people” who raise banners of helping the poor and the students and the vulnerable, while hiding the links between the policies they argue for, and the impacts those policies would cause.

  2. Fiscally Responsible says:

    This is a prime example of a naivety that plagues many college campuses, a naivety that has not experienced the REAL world.

    “There’s little threat of our debt ruining the economy today.” Are you kidding? The assumption of the low interest rates staying forever is irresponsible. And have you considered the slow economic growth and the credit downgrade that ultimately affects everyday Americans?

    “Joe Biden” That fact that there is a quote from Biden means credibility of your point is lost.

    “It was this small thing called the “recession.”” Joke or not, making light of the Great Recession is no laughing matter. This just shows how out of touch your argument is with the average Joe.

    I find your argument insulting to hard working Americans who have lost their jobs or are struggling to find work. Try washing some dishes at the local diner, cleaning pools for a living, running a small business. Maybe then you will be outraged at the fiscal course of our country.

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