I’ve been silent for a long time — not because I’ve been sunning myself, as Fitz recently alleged, but because I’ve actually been busy at the day job some of you insist I don’t have. Sadly, I even worked through most of a family vacation in Lake Tahoe. But during that week in Lake Tahoe, I did have one Great Moment in Parenting.
We were still on Eastern time, and my son, who will start kindergarten in the fall, is an early riser anyway. So we were up before the rest of the clan, walking around and killing time. Changing abruptly from whatever topic we had previously been discussing he looked at me and said — I wrote this down right away so I would remember it — he said:
Dad, I’m beginning to think that the government is lying to the people. Because they say they’re only borrowing the money, but they’re never going to pay it back. It’s a big fake.
That pretty much sums it all up, doesn’t it? I assume his thoughts on this were prompted by a family conversation the day before about the dubious value of lower taxes if we don’t restrain spending. My claim had been that if both major-party presidential candidates were going to spend like drunken sailors, I’d rather vote for the one who was going to tax me for it than the one who was going to leave the bill for my kids. My kids were apparently listening. Too bad they can’t vote.
While I’m on the subject, three related points. First, I also heard in the last month that if the national debt were calculated on an accrual basis –taking account of all the future liabilities created by current law — it would actually be about $80 trillion. My search for a source for this number has been frustrating but not entirely fruitless. As it happens, the Government Accountability Office tried to beat this drum rather loudly under the leadership of former Comptroller David Walker. He noted in 2006 that in the first five years of this century we more than doubled our long-term entitlement liabilities — from about $20 trillion in 2000, to about $46 trillion in 2005. It would be nice if we could shrug this off by comparing it to the size of the national economy, but in fact the liabilities also doubled in proportion to GDP, going from about 200% of GDP to about 400%. So when people talk about a national debt of a staggering $9 trillion, they’re really just warming up for the discussion we ought to be having.
Second, North Country Public Radio recently plugged an interactive budget simulator on its web site. The simulator is called “Budget Hero,” and the idea is to choose from a menu of fiscal policy options in order to shrink the budget deficit and postpone the year in which tax revenue will be insufficient to cover anything except entitlements and interest. (That year, according to the game, is currently 2033.) It’s far from a complete menu of policy options; for example, it gave me the option to cut spending on school lunches, but not to eliminate the Department of Education. It’s also a little weak on detail; for example, I could save $391 billion by “bring[ing] the troops home soon,” but it would actually cost $119 billion more to “bring the troops home gradually.” I’m for “soon” and “gradually,” so if there is a $500 billion difference between them then I surmise that the game makers must be giving these words different meanings than I would. It’s weakest on tax policy; “cut corporate taxes” costs $1.3 trillion, whereas “reform and hike corporate taxes” nets us $28 billion. If those are the choices, who could possibly be for cutting rather than reforming and hiking? But for all its pro-government, pro-federal, pro-tax limitations, I hope many people play the game. It’s more engaging than it is informative, but arguably our fiscal problems owe more to lack of engagement than to lack of information.
Finally, the aforementioned David Walker has recently taken his show on the road with the Concord Coalition’s “Fiscal Wake-Up Tour,” and the tour has apparently spawned a new documentary that will hit theaters August 22. It’s called “I.O.U.S.A.,” and you can watch the trailer here. I hope it’s still playing when I get back to Washington. If it exerts even a little positive influence on the choices we make this November, it’ll be a great public service.
UPDATE: This just in:
The government says the federal budget deficit soared in July, pushed higher by economic stimulus payments and $15 billion in outlays to protect depositors at failed banks.
The Treasury Department reported Tuesday that the deficit for July totaled $102.8 billion, nearly triple the $36.4 billion deficit recorded in July 2007.
We’re borrowing money to give away. I think that makes us officially pathetic. And a fat lot of good those stimulus checks did anyhow.