I find it frustrating to talk to a liberal about the deficit, debt and balancing the budget. My frustration comes from the fact that repeatedly in conversations they don’t understand the meaning of the terms.
Let’s start with balancing the budget. Most liberals I have spoken to believe that President H. W. Bush created the $8 trillion debt inherited by President Obama in 2008. They thought that since President Clinton had balanced the budget for a few years, there was no debt when he left office. They obviously didn’t understand what “balancing the budget” meant. Simply put, you spend only what you collect in taxes. If you collect $600 billion in taxes, you spend $600 billion. If you spend $580 billion out of what you collect in taxes, then you have a surplus of $20 billion which is unspent money. It has nothing to do with the debt.
Our national debt has been growing for decades primarily since the 1930’s. The debt increased enormously during the Great Depression especially since there was a huge expansion of the federal government and entitlement programs primarily Social Security. World War II increased the debt and every president from Franklin Roosevelt to George H. W. Bush has added to it. In short, it has been accumulating up to the $8 trillion level when Obama took office. It was NEVER paid off.
For over three straight years, the Democrats have refused to establish a budget to run the government even though it is a legal requirement. This has allowed Obama to spend unprecedented amounts of money on union related industries, green energy companies and other failed projects through his stimulus. His spending has driven the debt above the $16 trillion mark. In 4 years, he outspent all previous presidents since the founding of this nation.
To pay for all of this spending, Obama’s administration has borrowed money though the sale of government securities. Other nations, principally China, have purchased these securities. The borrowed money is part of the debt. Here is where the deficit comes into the picture. The deficit in simple terms is the difference between what the government collects from all sources to pay its debts and the amount of money the government spends. If the federal government spends $800 billion but only collects $600 billion in revenue then the deficit is the difference between the spending and amount of money it collects. In this case, it is $200 billion more. It was the various presidents who spent more than they collected that added to the debt and increased the deficit.
Obama has increased the debt and deficit enormously. He holds the record for spending the most in the shortest time.
What is often forgotten about the borrowed money is the interest rate. (Think of a mortgage or college loan as other examples.) Before a debt is paid, the interest must be paid first. According to the Congressional Budget Office, the US will have to pay $5 trillion in interest over the next decade. So one third of our national debt is interest payments.
Even the Congressional Budget Office has reported that taxing all of the millionaires and billionaires in the United States at a rate of 100% will not decrease the debt or deficit. It is a false claim by Obama.
Liberals either are ignorant or in denial about the consequences of our failing economy. Eventually, debts bring consequences. This is why they use emotion not facts to justify their support for Obama. We are in serious, serious trouble as a result.