Numbers matter when it comes to federal budget
03/29/2013 3:57 PM
03/29/2013 3:58 PM
Re March 24 letter by Aaron T. Euglad, "Federal debt, an investment in future"
Silly, silly, silly. How can we not get our numbers right when addressing issues like the public debt.
Yes, Mr. Euglad was correct in saying our debt stood at roughly 75 percent of GDP, but he forgot to add other public debt by government agencies, making the total public debt, just under $17 trillion. Based on our current economy, total public debt is about 100 percent of GDP, not good. What most folks do not seem to understand is that when government keeps borrowing, it reduces the availability of capital for other borrowers; the government keeps sucking the liquidity out of the market, making it a little more difficult for regular borrowers to raise capital.
Mr. Euglad, borrowing money to pay for ill conceived programs or to fund endeavors the free market will not fund is not investing. It is a variation of wealth redistribution. We are now spending $1 trillion more than we bring in; this is over spending, not investing.
When one invests they expect a return on their money, pure and simple. I would agree the building of roads and other infra structure are good investments, however, most other government activities cannot be defined as investments but rather just plain spending.
Lastly, sir, your comparison of an individual’s debt to income ratio to the government’s is not exactly correct. The government’s income is its tax collection and other revenues, and based on this measure, the U.S. government debt to income ratio is about six times: revenue about $2.5 trillion, public debt, $17 trillion.
The writer lives in Myrtle Beach.
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