Finance and Politics—Now How About a Solution?

By: Jonathan Neuber

Why should you care about our nations finances? For one, we have already accrued $395 billion dollars in interest owed for floating the public debt this year which now stands at over $13 trillion —and you thought last semester’s bill was high.
Social Security and Medicare and their unfunded liabilities are fairing much worse. Estimates vary, depending on which side of the aisle you are on and how you spin the numbers, but $106 trillion, twice the total private net worth of the United States, are the numbers used by writer Kevin D. Williamson of National Review, a conservative publication. Still hope to get what you paid in to the system? This column doesn’t endorse a more conservative view point, but the question remains will the government be able to live up to its promises or will be paying more out of our own pockets in the future.
To maintain the level of debt we are carrying and to keep the country safe means that tax increases are coming. Corporate America knows it. Cash and short-term investments on balance sheets of all companies on the S&P 500 according to a recent article in Money magazine, have risen to $1.14 trillion in the first quarter of this year. Companies are sitting on the sidelines with cash instead of investing it long term because they want to see how they will be affected by new healthcare legislation and the tax bills to pay for it.
It has been the policies of the current and the former presidential administrations that have led us here by their refusal to take on the hard issues, instead choosing to play to their political bases. It is the uncertainty of the future that is stalling the world economy.
Understanding and implementing constructive solutions for public finance is the only way to determine whether we can expand public services and social programs or have to cut back the basic services we expect when we need them. Just think about what the $395 billion dollars we are paying in interest on the national debt this year alone could bolster programs that already exist.
This can only be done if we stop digging ourselves further into the hole of fiscal irresponsibility. Join the discussion about how to fix the problem of our nation’s finances and post your thoughts on the topic.