Guest Comment: Whom will we choose?

Whom are we going to choose to be our president and our elected representatives this year?

And why do I ask this seemingly innocent question? I ask because, in my view, our politicians (certainly those at the national level and likely those at the state and local levels) are not talking to us about what’s at the root of most of our country’s problems.

And what might that be? I believe it to be the national debt and the interest we pay on it.

Are you sitting there thinking “what the heck is he talking about?”

If so, you need to understand that nearly one-fourth of the dollars budgeted and spent by the federal government this fiscal year (ended 9/30/08) is for interest on the national debt.

I’m sure you’d like to check out this information for yourself.

Certainly you shouldn’t take my word for it. So I’ve included at the bottom of this essay some Internet links for you to look at. They are based on or come directly from federal government resources. So, here goes.

The following information is important to you:

The largest expenditure by the federal government in 2008 is for “Health and Human Services —mainly Social Security and Medicare/Medicade”—over $700 billion dollars. This money falls into the ‘non-discretionary’ part of the budget. That means that our government is required, under the federal budget and under law, to pay out these monies.

The second largest expenditure is “defense”—over $600 billion dollars. This money falls into the ‘discretionary’ part of the budget. That means that our government has the option to spend or not spend this money. Given the current circumstances around the world, it’s pretty much a given that our government, regardless of which party is in power, will continue to choose to continue defense spending at a significant level.

The third largest expenditure is “Treasury Department”—over $500 billion dollars (of which about $455 billion is interest). This is clearly non-discretionary spending. If the government chose to discontinue paying interest on the national debt, the entire world economy would likely come to a virtual halt.

The details of this spending data can be found in the following Internet link (http://www.federalbudget.com/. This is an important piece of information for you to view. As you will see, there are clearly only three significant areas of the budget that can be cut in order to have any impact on the national debt.

The chart on the opening page of this link shows data from the U.S. Treasury identifying the levels of federal spending for each agency.

There’s a lot more information on this link, but its source is a non-government organization that provides a lot of non-objective information.

Total budget spending for 2008 is $2.9 trillion—that’s $2 trillion, 900 billion dollars. Total revenues are $2.662 trillion dollars—a shortfall this year of $238 billion dollars. There’s a link identified below that will show you that this same sad news has been going on for many years.

The national debt as of the end of this year will be just short of $10 trillion—about $33,000 for every one of the 300 million citizens in this country.

The interest paid on the national debt is about $1500 per citizen.

My first thought here: What kind of tax increase would be needed to pay off the national debt?

My second thought here: This $1500 in interest for each citizen is a direct cost to you and me in terms of the amount of income tax we pay. Since corporate income taxes are about one-third of the amount paid by individuals (see the chart shown below) we—particularly the reasonably comfortable ‘we’—can assume that this $1500 per person might be higher.

Those of us who are retired (generally a two-person family) can assume that we are likely paying a minimum of $3000 per family in federal income taxes just to pay the interest on the national debt.

Those of us who have families we are supporting can assume that they (on average) are likely paying at an equivalent level for each member of their household.

Obviously, this number moves up or down depending on how much income your family has and how much income taxes you pay as a result.

How would you like a reduction in income taxes of $1500 a year (or more, or less) per family member?

Imagine how much of a positive impact you could have on the economy — your own household economy and the American economy — if you had that much extra disposable income.

The following chart shows individual and corporate income taxes for the past three years.

Note whose share of total income taxes is increasing and whose is decreasing.

If we could elect presidential and congressional candidates who would work toward substantially reducing, or eliminating, the national debt, income taxes could eventually be cut for everyone.

Part of the problem right now is that it’s almost too late for us to do something about this.

If everyone, however, who reads this will contact their congressperson and senator, and send a message to them and to their choice of presidential candidate (check their Web site—you’ll find a place to send a message to them and maybe even a phone number), just maybe we can get the ball rolling before the election.

My bottom line gut feeling is that this country could increase taxes on those who can best afford to pay more (yes, I know that smacks of liberalism and redistribution of wealth). But who else can afford it?

Certainly, we got this level of debt by reducing taxes!! So shouldn’t we consider fixing the problem by doing the opposite? Perhaps some in the middle class might be able to handle part of it.

Certainly those lower and middle income (let’s say, up to $100,000 in income) families with children cannot.

If the only way out of this high debt and high interest is to raise taxes (and I don’t see another way — see that chart in the link http://www.federalbudget.com/ again), then raising taxes (on those who can afford it—and who benefited greatly from the tax reductions of the past several years) is probably the right thing for our country to do.

The fact is that it would impact the wealthy and the high income corporations for a relatively short time — perhaps 10 years — maybe more??

But the end result would be, in the long term, significant decreases in income taxes for both the very wealthy and the not so wealthy.

** This solution would allow our government to get back to its constitutional obligation of serving ALL of its constituents. Such a solution would eventually result in a correction of all the shortcomings of our education system, our transportation system, and any of those areas in the list below.

But right now there’s not enough money to allow the government to fully address most of these needs: Education, transportation, veteran’s affairs, energy, interior, environmental protection agency, national, science foundation, commerce (which includes, I believe, the food and drug administration), national defense

You can replace this list with one of your own choosing.

** This solution would allow our president and our representatives to get back to focusing their attention on what’s important for the country instead of fighting and posturing to keep its citizens from knowing (what I believe to be) the real cause of our problems.

Yes, I do believe that our representatives know exactly what the problem is, but are so fearful of increasing taxes to fix it that they have been paralyzed into not even discussing it.

The bottom line is that, under the circumstances that exist today, and considering what our presidential candidates are telling us, there appears to be only the solution I’ve outlined.

Many will argue that pulling out of Iraq and cutting defense spending would be an alternate.

However, I fear that’s not going to happen any time soon regardless of who wins the presidency, and regardless of which party is in control of the house and senate, and such a move would have a comparatively small impact.

Some will argue that repairing the ills of medicare might do it. But, even with the repairs, medicare will continue to be a burden at least as great as it is today.

I hope you’ve found this interesting enough to read it through and give it some serious consideration. If you have, and if you agree, pass it along to all of your own correspondents.

Maybe we can get our politicians to do what they really need to do for our country.

The best link to federal budget data is http://www.whitehouse.gov/omb/budget/fy2008/pdf/hist.pdf. Pages 32, 34, 47, 49, 58, 64, 70, 76, and 131 provide the most comprehensive current year/future year detail related to this issue. This data is directly from the U.S. treasury department’s details of the federal budget development process.

This best link showing interest payments by the treasury on our national debt by month so far this year thru August is http://www.treasurydirect.gov/govt/reports/ir/ir_expense.htm.

The fiscal year ended September 30, 2008, but September data was unavailable at this writing. This link also shows interest payments for the past 10 fiscal years.

The best link showing how much of the t-bill portion of the national debt is owed to whom (mostly countries other than our own is http://www.ustreas.gov/tic/mfh.txt. As you will see, the largest debt holders are Japan and China.

Terris Teale moved to Green Valley seven years ago from Cedar Rapids, Iowa, where he worked as an operations manager for the U.S. Postal Service. Currently he works part-time teaching math, language and reading skills to GED and remediation students attending Pima Community College’s Desert Vista Campus.The views expressed are the writer’s own and do not necessarily reflect those of this newspaper.

Fiscal Year 2006

2007

2008

Individual income taxes (this is 1 trillion plus) 1,043.90

1,168.80(+124.9)

1,246.60(+77.8)

Corporation income taxes (this is billions) 353.9

342.1(-11.8)

314.9(-27.2)