It has gotten a little frosty this week in sunny California. I know, it's nothing compared to what folks Back East and in the Mid West are going through. But, winter is back in town.
This Is Not
Sustainable
By Paul H. Betancourt
January 2015
Looking at
last year’s posts it seems pretty apparent to me that you all prefer my rants
on policy and politics to my stories of life on the farm. Maybe one of the
publishers I turned down was right after all.] Fair enough. I am still going to
tell stories of life on the farm, but we will start this year with something I
have been thinking about for a while.
One of the
driving principles of our environmental friends is “sustainability.” Of course
there is no agreed on definition of sustainability. The general idea is that we
should not do things that deprive future generations natural resources.
Fair
enough. I like the idea that we want to build for future generations. The Boy
Scouts taught us to leave things better than we found them.
That being
said $17 Trillion dollars of national debt is not sustainable!!!
When I
teach about fiscal policy in my American Government class I put the national
debt clock up on the wall. I mark the national debt at the beginning of class
and leave it running while we talk.
They are
shocked that the national debt at $17 Trillion is larger than the national
economy, which is only $14 Trillion. They get bug eyed when I remind them that
means if we tax everyone at 100% for a year we still would not pay off the
national debt.
Eventually
some one asks, “what is their plan to pay this off?” When I tell them the plan
is for them to graduate, get jobs, and start paying taxes, some will respond,
“That’s not a very good plan.” I agree.
As a farmer
I have a fair amount of experience with debt. I have been in debt beyond my
wildest dreams and it was no fun. There are two main problems with having such
a huge national debt-
1] We have
to use money we could otherwise use for good things that now must be used to
make interest payments for past spending. [Taking out a mortgage for an
appreciating asset makes sense. Going into debt for something like a four star
vacation does not.]
2] We are
kicking the debt can down the road to our kids and grandkids. Even is we stop the horrible deficits right
now, it will take decades to pay back the current debt.
A friend
who is a retired community college instructor brushed me off and said, “Don’t
worry about the national debt. It’s not important.” Excuse me? Nations can
collapse if they mismanage their finances. In this weeks news it was reported
that even Greece and England are finally remembering how to tighten their
fiscal belts.
Taxing Ourselves
Years ago I
took some heat for not supporting a local school bond. I agreed that we needed
the new facilities. What I disagreed on was the method of taxation. The bond
was going to essentially fall on the farmers as the largest property owners in
the area, instead of the general public. The question in a self-governing
society is not, “How much will we raise taxes on someone else?” In a
self-governing society the question is- “How much am I willing to pay in
support of this our that particular issue?”
This Is Not
Sustainable
One Irony
in all of this is that as a candidate Barack Obama criticized President Bush
for creating a $7 Trillion debt. You can find it on You Tube. Apparently I
misunderstood. Judging from his actions as President, Obama seems to have meant
Bush should have taken us further in debt. He’s gone further into debt than his
predecessors ever dreamed of.
If the idea
of sustainability is important enough to drive other public policy we should
consider it when looking at our public finances. The bottom lone is our level
of national debt is unsustainable. Debt for an emergency or to buy appreciating
assets is OK. But, multi-generational operating debt is not sustainable.
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