Friday, December 11, 2009

An Open Letter To President Obama, Senators Webb And Warner, And Representative Scott

Loyal reader, you know how often in the past I railed at President Bush and the Republican Congress for their borrow and spend operation of the Federal Government. I attacked them repeatedly for nearly doubling the national debt during the years of the Bush Administration. You also know that nearly two years ago I warned then-candidate Barack Obama about making promises to the voters that we as a nation couldn’t afford to keep. (I’m Sorry Mr. Obama—No You Cant. You also probably noticed that I pretty much stopped talking about the national debt after Mr. Obama was elected president.

Well, this morning I was reading the nearly full-page editorial in the Richmond Times Dispatch criticizing President Obama for being a hypocrite on the issue of debt. My thought was, “How amazing that you now attack Mr. Obama for increasing the national debt when for the eight years of the Bush Administration you kept silent.” As this thought crossed my mind I realized that I was as guilty as the RTD for not discussing the debt issue since Mr. Obama took office. To the extent that my silence was caused by partisanship on my part, I apologize. The following is long overdue.

Dear President Obama, Senator Webb, Senator Warner and Representative Scott:

Let me begin by telling you that I am a life-long Democrat. I voted for all four of you in the two most recent federal elections. And it is likely that I will vote for you again when you next face reelection. Therefore, you can be assured that in writing this letter I have no partisan objectives.

Mr. President, in the nearly eleven months you have been in office the federal government’s debt has increased by $1,452, 862, 303, 218.05. That’s an increase of nearly $1.5 trillion dollars in less than one year—more than 13.5%. I realize that much of this increase can be attributed to the one-time (hopefully) rescue of the banking industry from the results of their own mismanagement and the economic stimulus package that was enacted at the beginning of your administration. However, debt is debt. We owe it regardless of the purposes for which we incurred it.

Mr. President, I understand that most of the current national debt was incurred during the administrations of your predecessors. I also know that when you started your campaign to be our president you could not have known of the economic crisis that would soon affect the United States and the world. Without that knowledge you made promises to the American people, which, in normal circumstances we could have afforded. Unfortunately, the recession has increased federal spending considerably while it has also reduced revenues below anticipated levels. We no longer can afford everything we want.

What does it mean to have a national debt of $12 trillion dollars? For one thing it means that we have a huge annual debt service. In fiscal year 2009, for example, the United States government spent just over $383 billion in interest on our debt. That amount is actually a decrease from previous years because during the current economic downturn Treasury is able to borrow money at depressed interest rates. But even if the debt service were to stabilize at the current amount, think of all the money we are wasting on interest payments. $383 billion would pay the entire yearly budgets of the Departments of Education, Transportation, Health and Human Services, Veterans Affairs, State, and Homeland Security, as set forth in your 2010 budget, with almost $10.5 billion left over. Even if we were able to bring our annual budgets into balance, which your budget doesn’t project as happening anytime in the next ten years, we would still be paying at least six department's budgets worth of interest every year indefinitely into the future. Mr. President, “that’s real money,” and it will keep the government from doing many things that are required for national security or are desired by the American people.

Mr. President, you have promised to cut the annual federal deficit in half by 2012. Unfortunately, that’s not enough. Cutting by half means we will still be spending nearly half a trillion dollars per year more than we collect in revenue. That will be an additional increase of over two trillion dollars in our national debt by the end of your current term. It will require the Treasury to borrow that amount of money to keep the United States from defaulting on its debts.

There is only a finite amount of credit available. The United States has already borrowed more than $12 trillion of it and we will have to continue to increase our borrowing so long as we spend at a deficit rate. Every dollar the United States borrows means that there is one dollar less available for other borrowers. Further, there has to be some point beyond which our creditors will be very leery of lending us more. What happens on the day that the Treasury needs to borrow a few billion dollars to meet our obligations and nobody is willing to lend it?

Senators Webb and Warner and Representative Scott (my representative), you are a big part of the problem. It is the Congress that passes the appropriations acts that permit much of the government to operate each year. Each year that we have a deficit is a year in which you in the Congress have appropriated more than our revenues will cover. It is your votes on appropriations bills, either in committee or on the floor of your chamber, that fuel the annual increase in federal debt. It is you and your fellow legislators who must stop our overspending addiction by stopping the practice of appropriating more than we can pay for. You have to sift through those appropriations bills to make sure that every appropriation is necessary and will benefit the country as a whole rather than just one locality. Although you may feel secure in your reelection in seeking or approving more spending, the national interest requires that you have the courage to say "no."

There is only a short amount of time left to bring our spending under control. Each year that we procrastinate will make it harder to ever balance our budgets. At some point our total debt will become so great that our children, grandchildren and even great-grandchildren will never be able to pay it off. Mr. President, you and the Congress need to make the difficult decisions that will enable us to eliminate our annual deficits and begin the process of paying off our debts. You need to do that now.



1 comment:

Scott said...

I agree with your concerns, but I somehow doubt this letter will change the disastrous course that this country has set on.

From an investment point of view, the longterm hedge is against the U.S. dollar.

The horrible thing is that this debt spending may not totally unwind for yet another decade, or ever, if the foreign occupations don't end, health care is not REALLY reformed, and America remains addicted to fossil fuels.

I urge you to consider joining the Green Party.