National Shell Game Debt

The ongoing debate about the causes of our national debt is not based on a basic reality: It’s all an accounting shell game.

The U.S. government "borrows" from itself by taking money in the SS Trust Fund (and other supposedly separate funds) to pay today's bills and sells Treasury Bonds to make up the rest. We are only pretending these trust funds are separate entities. On paper, yes. In reality, no. It's all the U.S. government in the end, run by the same elected officials who can vote any moment to do whatever they want with the money (or debt). To pretend otherwise is to fool ourselves.

It doesn't really matter which government spending program ends up with the money in the trust funds--Medicare, Medicaid, military, interest on the debt, or new toilets for the Capitol building. We, as a country, still have the same total number of dollars missing. Missing in the sense that we spent money we don't have. Borrowing it from trust funds or through Treasury Bonds sales to foreign countries or individuals produces largely the same result--debt, and lots of it. If we raise income taxes, capital gains, FICA or any other tax doesn't mean that the money stays separated.

Think for a minute about the other taxes we often get approved this way. We approve a lottery easily if the money goes to "schools" or "education," for example. "Sure," we collectively say, with little argument. "If it goes to schools, then it's okay." What we don't realize is that the extra money is not added to the current school budget, it replaces what's already there, freeing more money to be used from the general fund for other things. This doesn't happen at first because it would be too obvious. But over a short number of years the school system's budget simply gets replaced by the lottery money, not augmented by it. Gas taxes for roads, cigarette taxes for health care, hotel taxes for infrastructure...it doesn't matter. It's all the same lie.

This idea of "targeted" taxes for certain programs is never what it seems.

We need to stop even thinking that one program or another is really separate from others or is "the" financial problem. Accountants may try and keep it all separate, but it's a false distinction at the most basic level. (Remember that silly "lock box" debate during Al Gore's presidential run? Everyone knew it was all crap.)

The idea for a commission to present a solution in an "all or nothing" fashion is a bad idea. It doesn't actually remove politics from the process as is claimed. It only allows the politics to be hidden from public view, which is what many people actually want. Private backroom deals will be the only forum.

Maybe we should look at everything from scratch. We can't keep going like we are. As our national debt goes up, our worldwide clout goes down. Eventually we won't have any leverage at all; someone in deep debt never does. We will be the ones with restrictions placed on our behavior, the same way we've done for years to the rest of the world. When that happens it won't matter what promises or plans we've made for ourselves. We will have sold our right to make our own decisions in order to keep the richest in this country rich just a little longer.