Snow job: There’s plenty of money

Published 16 years ago -  - 16y ago 37

On Tuesday, March 4, Reuters News and Financial Intelligence reported that U.S. Secretary of the Treasury John “Snow faced intense questioning from Democrats who said the Bush administration has produced no cost estimates for prosecuting a war, nor for a possible occupation afterward, and asked where the budget surpluses had gone.”

It may be impossible to estimate what a war with Iraq is going to cost, but it definitely is not true that we couldn’t know exactly what it has cost us so far.

With over 250,000 troops in the area, the National Guard pressed into service, six aircraft carriers and other ships deployed to the area, maneuvers in Kuwait, bombings in the Northern and Southern “no fly” zones and beyond, Tommy Frank and his computers in Qatar, and bribes paid to build some sort of coalition of the willing—we ought to have some cost estimates to date.

The only thing we citizens know for certain is that in the last five quarters the national debt has increased $638.7 billion. That’s not chicken feed folks. How much of this increased borrowing was caused by Iraq? Nobody asks for an accounting here.

Neither did any of the penetrating news watchdogs ask the Secretary how he has been managing to finance a government that has been bumping its head on the national debt ceiling for more than a week now, completely unable to borrow at the rate of the two billion per day to which it has become accustomed.

As far as surpluses are concerned, they’re still there as brilliant as ever. The government just conveniently stopped reporting the books in terms of the “Unified Budget.” Instead, they now use “over budget” accounting.

In fiscal 2000 and 2001, entitlements were the major factor in surpluses and last year, fiscal 2002, they still accounted for a surplus of $149 billion with Social Security leading the pack at $89 billion despite fewer people working. These elements are part of the planned budget so they cannot possibly show up in “over budget” accounting. Ask Ken May of Enron about that.

Pressed further, the new Secretary of the Treasury fell back on the old Gross Domestic Product (GDP) rebuttal saying that; “deficits of that size ($307 billion this year and $304 billion predicted in fiscal 2004) diminishing in later years would not be harm to an economy worth $10 trillion and instead would help create jobs and foster investment.”

Let’s take a closer look at this GDP crappola.

Gross Domestic Product is something the crafty often bring out of the woodwork to explain away our horrendous national debt. With a GDP of $10 trillion a year, we can certainly afford a debt of $6.4 trillion, 64 percent of a year’s gross sales.

The implication is that we could easily pay off the national debt if we all sent all of our earnings to the government for 64 percent of the year.

Don’t laugh. This is the argument they use.

Of course, we would all be dead in a matter of days if we tried to do this. Just imagine going to the supermarket and finding no one there because they are all sending their money to the government and haven’t spent a cent to reorder inventory. The same at the gas pumps, farms, offices, hospitals, courts, and wherever you normally find people selling something, be it product or service. Once inventories and tools are gone, no one would reorder because their money goes to Washington.

You can play around with this idea all you want. You can cut it down to six months, three months, or even just a week every year. You can even talk about shooting squirrels and cooking them over a wood fire. It still comes down to the same thing. All you are doing is trying to make payments against a debt you are responsible for paying off. There is no magic trick.

Go to your mortgage lender or any mortgage calculator on the Internet and you will find that in order to pay off a debt of $6.4 trillion, at say a low 5 percent annual interest rate, it is going to take you more than 50 years with payments of about $350 billion per year.

Do you see your government setting that much money aside to pay down the national debt? Maybe your children and grandchildren can figure out a better way.

Published originally at : republication allowed with this notice and hyperlink intact.”

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