National Debt

Let's face it. Both political parties are being disingenuous about our federal budget and the national debt. Republicans are putting forth the illusion that we can balance the budget and pay off the debt by cutting expenses, while Democrats are insinuating we can do the same by simply raising taxes on the wealthy.

Both parties are - to put it bluntly - full of crap. If we have any hope of balancing the budget we will need to both make dramatic cuts in our expenses and raise taxes. These cuts will need to be far more severe than any politician is willing to admit and will need to include cuts to such sacred items as defense and social security. Likewise, the increased taxes will need to be levied not just on the wealthy, but on virtually all tax payers. Remember, if we would somehow balance the budget tomorrow, we would still need to pay off $15 trillion in loans which we, as a nation, have already acquired.

There are those, including President Obama, who would like to delay such balancing and repayment until our economy is healthier. But I say that delay could invite economic disaster. The interest rate we pay now for our debts is "bargain basement." The Federal Reserve - in an effort to encourage borrowing - has reduced the national interest rate to between 0.00 and 0.25 percent. However, that is sure to rise as our economy improves. Therefore, money borrowed now is relatively cheap. But money borrowed later - when interest rates are higher - will be much more expensive. The federal government is currently paying a miserly 0.60 interest rate on Series EE Savings Bonds. That will need to change when the economy improves.

Therefore we, at the very least, need to make the necessary sacrifices now and balance our budget. We certainly can't afford to borrow more money later when increased interest rates could, literally, break the bank.