Oblivious Public Interviews U.S. Debt

April 2008


Oblivious Public (OP):  Apparently you’re a really big deal, but to be honest, I can think of other topics I’d rather focus on right now.

U.S. Debt (USD):  That’s exactly the kind of welcome I expected and that’s precisely the problem.  The American public, even those who consider themselves tuned in to important issues, are really sleeping on me.

OP:  Well, you aren’t exactly the sexiest topic out there.  I can’t imagine front page headlines selling papers if they feature the U.S. Debt.  You’ve been around for as long as I can remember, so I don’t see what the big deal is.

USD:  Really?  And why is that?

OP:  Well, I’d compare you to consumer debt.  My credit card balance is important, but not as important as food, friends, family, and helping those in need.  Frankly, I have other priorities that deserve more immediate attention and so does the United States.

USD:  I see.  Unfortunately, this seems to be the standard opinion.  And I’ll tell you right now that it’s the wrong one.  I deserve and need as much immediate focus as any other issue.

OP:  I beg to differ.  There’s education, health care, poverty, the U.S. offensives in Iraq and Afghanistan and of course the presidential election.  Obama 08!

USD:  What’s sad is that you don’t realize that I have a lot to do with every topic you mentioned and many more.  The future of education, health care, the economy and defense are all influenced by how poorly I’m being handled.

OP:  Are you honestly telling me that you deserve as much focus as all those other topics?

USD:  Yes.

OP:  I don’t see it.  But since Onyx Cranium has forced me to do this interview, I might as well have you state your case. 

USD:  How generous of you.

OP:  Thanks.  I guess we’re supposed to be alarmed at your size.  What are you – around $7 or $8 billion right now?

USD:  As of this interview, the United States National Debt is around $9.5 trillion.  That’s trillion, with a “t”.  Just the interest payments on me take up 8.25% of the annual federal budget as of 2006.  The principal balance isn’t even being touched although the U.S. is paying its creditors about $227 billion a year in interest.  Just so you know, I’m increasing at about $1.5 billion a day.  I believe that makes me worthy of more focus than I’ve been getting.

OP:  Uh-huh.  Well, I won’t act as if that isn’t a lot of dough.  But with all due respect, what the hell does that have to do with the more pertinent issues I mentioned earlier?

USD:  You seriously aren’t making a connection?

OP:  If I was, I wouldn’t have asked.

USD:  I have EVERYTHING to do with federal funding and therefore policy for health, education, unemployment, the environment, the courts, and almost anything else you can think of. 

OP:  What does the National Debt have to do with all those things?

USD:  Sweetie, we share the same budget.  Spending on me cuts into government spending on everything else, but what you really need to focus on is me (the debt), Social Security and Medicare.  If I could just get you people–

OP:  Who is “you people”?

USD:  The general American public.  If I could just get the average citizen to focus on those three issues right now, some much needed progress would be made.

OP:  What do Social Security and Medicare have to do with you?

USD:  If the federal government and thus the people who put the president and members of Congress in office don’t directly address the current way Social Security, Medicare and the U.S. Debt are handled, by 2040 nearly every single tax dollar collected will go directly to funding just those three things.  No tax dollars will be left to pay anything besides benefits for those on Social Security and Medicare and the interest on the National Debt.  Please tell me that you understand why that’s a problem.

OP:  Okay, slow down.  I’m not stupid.  Even if what you’re saying is true, the federal government does not get all of its money from taxes.

USD:  True, but over 60% of income for the federal budget comes from taxes and over 40% comes from individual income taxes.  Maybe now I’m speaking your language.  Taxes are a “sexy” topic and one of the staple issues discussed by all the presidential candidates – even those who don’t have a shot in hell of getting the Democratic or Republican nomination.

OP:  You’ve finally brought up a current key issue – the election.  Now we’re talkin’!

USD:  But do you know exactly what we’re talking about?  Taxes.  In fact, we’re talking about tax cuts and raises and who should be getting them and who shouldn’t.  And when it comes to this issue, I got some bad news for you.

OP: Don’t say what I think you’re about to say.

USD: Taxes will have to go up.  Even my 2040 projection is based on the assumption that the current tax cuts enforced by Bush will be allowed to expire in 2010.  If they are renewed, well the federal budget will get even tighter even sooner.  Social Security and Medicare are entitlement programs and benefits are automatically distributed to whoever qualifies.  And with the Baby Boomers entering their 60s….well you see why you have to focus on me now.

OP:  Not exactly.  I know all about the Boomers and how they will make Social Security and Medicare more expensive.

USD:  I don’t think you do.

OP:  Give me a little credit.  I’m not as dumb as you think.  Social Security is paid by people who are currently working.  Up until the Baby Boomer generation, many more people were paying into the system than were using the benefits.  Think about it.  The Baby Boomers have been paying into this system for decades.  There’s actually a surplus in the Social Security budget and it goes into some type of government trust fund, so we have reserves.

USD:  Well, you’re partially right, but not right enough.

OP:  What do you mean?

USD:  Everything you said is true, but you didn’t take a crucial detail into account.  The federal budget has been at a deficit for 31 of the last 35 years, which means that the government – your government – is in the habit of spending more money than it takes in.

OP:  So?

USD:  So these are the same people who have been “guarding” the Social Security trust fund.  And guess what they’ve been doing with it?

OP:  Oh no.  Don’t tell me.

USD:  You guessed it.  They’ve been taking that surplus money from Social Security taxes and using it elsewhere.  The reserves, as you call them, have been rerouted to other programs and services for years.

OP:  Man, you’re exhausting and a bit annoying.  Regardless, there are enough people currently paying Social Security taxes to directly fund those collecting benefits.

USD:  If we continue operating the way we have, that will only be true for another 10 years.  Tops.

OP:  Whatever. There is still time to make some adjustments down the road to address its costs. The year 2040 is still a ways off.

USD:  Do you feel that way about the year 2007?

OP:  Why do you ask?

USD:  Last year the annual report issued by the Social Security and Medicare Board of Trusteees detailed how Medicare is already running in the red.  Just the part of Medicare that covers the hospital costs of senior citizens already pays more in benefits than it collects in payroll taxes.  Combine this little nugget of knowledge with the fact that Medicare’s costs are projected to increase at five times that of Social Security.

OP:  But why?

USD:  Well Medicare covers outpatient care, hospital bills, surgeries, medical tests, nursing facilities, hospice care and various physician fees.  These type of costs are going up a lot more since Americans are living much longer and will therefore need a wider variety of medical services for an extended period of time.  Then there’s the new prescription drug benefit that was added by Bush and a then Republican majority Congress in 2003.  It’s projected to add over $500 billion in costs by 2013.  Actually, Medicare is a “sexy” topic but the finances behind it aren’t as appetizing.

OP:  Huh?

USD:  Well, as you know, Baby Boomers want more coverage and benefits, not less.  That costs money and it has to come from somewhere.  The only realistic options are increasing taxes and cutting the benefits rather than expanding them.  No person who is aging wants to be told they’re going to have less help with their mounting medical bills, but if we want to pay for more than just the care of retired people and those on disability, that’s what we’ll have to do.

OP:  Geez, you’re all over the political map!  First you sounded like a Democrat when you talked of raising taxes for the wealthy and letting the Bush tax cuts expire.

USD:  I didn’t say tax increases would just be applied to the richest Americans, but that’d be a start.

OP:  Now you sound like a Republican.  Reducing benefits for the elderly?  Are you mad?  Let me guess.  You aren’t a proponent of universal health care are you?

USD:  I’m a proponent of the U.S. public and government growing up and being realistic.  If you want universal healthcare, along with other government funded programs and services – like parks, roads and education - taxes will have to be raised across the board.  I’m not saying it wouldn’t be worth it, but that’s what it’d take.  Or we could just continue to spend money that we don’t have.

OP:  But reducing benefits.  That sounds horrible.

USD:  Of course it does and so does raising taxes.  This is why people seeking elected office tend to push me to the side.  I bring up all these other issues.  No one wants to piss off older voters and scare younger voters.  If we can’t afford the benefits we pay out now, how can we tack on more benefits for even more people?

OP:  Okay, I’ve heard enough.  I may not know all the details, but there are other ways to balance the federal budget besides raising taxes and cutting senior citizen benefits.   There are better ways to effectively cut spending.

USD:  I’ve heard them all, but go ahead and give me your best shot.

OP:  Well, the war in Iraq for one.  If we would just withdraw, we could stop this hemorrhaging.  It’s projected to cost more but already it’s totaled over $600 billion and Bush put in a $90 billion budget request just for the wars in Iraq and Afghanistan in 2007.  He even projected $141 billion as a budget item for 2008.

USD:  First off, staying in the war will definitely be more expensive than leaving.  I wouldn’t dispute that.  But withdrawal also has costs – many of them hidden - so don’t think it’ll completely cease spending in those areas.  It won’t.  And even if spending were to stop entirely with troop withdrawal, that’d take $141 billion out of the 2008 budget.  The deficit alone is expected to be near $160 billion.  Not only would leaving Iraq and Afghanistan not put a dent in the National Debt, it wouldn’t cover the deficit for one fiscal year.

OP:  It would still be a step in the right direction.  Besides, there are more important reasons than finance to leave Iraq .

USD:  I don’t dispute that, but from a purely budgetary perspective, it’s not enough to get us where we need to be.

OP:  Fine.  What about government fraud and waste?  Pork barrel spending as its called.  Congress gives away all kinds of money to pet projects and tacks it onto other bills.  That’s money that could go elsewhere.  Barack Obama co-authored strong bipartisan legislation to address these issues two years ago.  Even Hillary Clinton and John McCain have weighed in on this.

USD:  Indeed they have and I’m all for government being less sneaky and deceptive to those it serves.  But cutting out government waste, including pork spending would have saved an estimated $29 billion from the 2006 budget.  The problem is that the deficit was around $250 billion.  Again, it’s an obvious answer and like most obvious answers, it falls short of what’s really needed.

OP:  Okay, okay.  Though I disagree, a favorite of Republicans is reducing welfare and –

USD:  Please!  Family Support, and that includes the current form of welfare, TANF, was less than 1% of the 2006 federal budget.  Let me save you some time and list how much or rather how little of the federal budget is used on items that people love to talk about reducing or eliminating.

OP:  Fine.

USD:  Unemployment was just over 1.2% of the budget.  Science, including space and technology, the federal justice system, housing assistance, natural resources and the environment, agriculture, food and nutrition assistance, and general government services are spending categories that each take up less than 2% of the federal budget and several take up less than 1%.  Even health, transportation and community development each take up less than 3% of the federal budget. And you may also be interested in knowing that International Affairs, which includes foreign aid, made up just over 1% of federal spending in 2006.  And that's been the case for some time.

OP:  Damn.  But still, don’t all those categories add up?

USD:  Sure and I’m not saying that there isn’t room to streamline these areas, but they aren’t the cure-all people make them out to be.  On the other hand, Social Security, Medicare, and Medicaid comprise approximately 40% of the federal budget and they are automated entitlement programs that are steadily increasing.  If we want to make some headway on our budget crisis, this is where we need to really concentrate.  Or you could cut out all other spending areas including National Defense.  That’s what my projection for 2040 does.  The only other spending category would be paying interest on me and I’d be several trillion more dollars by then.

OP:  Well, I still say we can cut in many of those smaller budget categories.

USD:  Of course you could, but think about it.  Do you believe that the federal government puts enough money into public education?

OP:  Of course not.

USD:  Well, you could cut there.   But keep in mind how poor funding already affects our elementary, secondary, and higher education systems.  Education, employment and social services combined comprise less than 5% of the federal budget.  So where exactly do you want to cut?

OP:  I really think if we’re going to be a better country, we need to spend more in those areas.

USD:  So now we’re back to how that could be paid for and this means that we’re back to raising taxes and reducing benefits in areas where we spend the most money that we already don’t have.  What I’m trying to get across to you is that we’re facing a crisis beyond Iraq, lapel pins, infidelity, and corporate greed.  The budgetary shit is hitting the fan and we’re getting a front row seat to a show that no one wants to see.   Denial is not the answer.

OP:  Well, could I – the public – apply more pressure to politicians?

USD:  How about you start with applying any pressure?  Sure there are people, organizations, bloggers, and think tanks that are all over this issue, but the general public has hit the snooze button more times than I can count.  Why would someone running for office talk about raising taxes to people whose money is already being stretched thin by rising gas and food prices?  Why would a candidate tell a pubic that is in worse health than it was 40 years ago that they will be more on their own when it comes to medical bills?  The answer is that they wouldn’t – not unless the public demanded the hard truth and some harder solutions.  Ya’ll are asleep at the wheel.

OP:  Okay, I’m hearing you.  But not everyone wants to write letters or risk getting arrested at some protest.  Plus I’ll admit that I’m short-sighted.  I keep thinking I’ll just deal with all this one day or that I’ll move to Canada or France before it all gets too bad.

USD:  Wow, that’s really responsible of you.  Be prepared to shell out more taxes if you’re going to either of those places and be careful of protestors in France. These days students are hitting the streets over jobs – not tyranny.

OP:  Well, if I could just pay it directly-

USD:  Oh, but you can.  Anyone can go to Public Debt Online (www.treasurydirect.gov/govt/govt.htm) and get the daily report of what the country owes.  You can also contribute to directly paying down the U.S. Debt without going through any additional channels.  So far, I’m not encouraged by what I’ve seen.  We’d collected less than $2 million dollars through this site.  That’s not even a drop in the bucket.  That’s like midst on top of the bucket.

OP:  Well, I don’t know what you expect me to do.

USD: Have you been listening?  You have to do something!  You have to make some harsh demands on your politicians and on yourself to address this problem for your children and others coming after you.  Actually, anyone who is younger than the Baby Boomers and especially those under 40 really have no choice but to pay attention and take action.  Vote for whomever you want, but don’t fall for the partisan okey doke. 

OP:  Partisan okey doke?

USD:  Yeah, you know how the Democrats talk about what needs to be done by government without precisely how it will be funded.  Then there are the Republicans who say the government shouldn’t foot the bill for anything except National Defense and then they use various loopholes to fund ineffective abstinence programs, corporate buyouts and tax havens for the wealthy.  And be careful about the various proposals to privatize certain elements of Social Security, retirement and the like.  Most of these plans are scant on details and long-term practicality. You can’t get something for nothing.  Even many in the Green Party seem clueless on how the research for bio fuels has contributed to worldwide food shortages and price increases for the poorest citizens.  Everybody needs to look a little closer and act more logically.

OP:  My head is spinning.  I need you to wrap this up.

USD.  Social Security, Medicare and the Debt belong front and center with every other item we spend money on and unless you remember this, I’ll just get bigger and bigger.  Interest on the growing debt will take up more and more of the federal budget.  My suggestion is that you do something proactive rather than reactive.  And just so you know, that window of opportunity is closing.

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Facts and figures presented throughout this Concept/Subject Interview were presented and detailed in the book Where Does the Money Go?:  Your Guided Tour to the Federal Budget Crisis by Scott Bittle and Jean Johnson of Public Agenda Online.

Want to learn and do more?  We though you’d never ask.

1)       Buy the book or one recommended by Public Agenda Online.

2)       Visit the website “Facing Up to the Nation’s Finances” at http://www.facingup.org/.