What To Do With $345 Billion

2009-2-18 10:57:00

[Compiler's Note: This article is actually an excerpt from a book that JJ Dewey is currently writing, entitled "Fixing America."]

As of this writing the National Debt under Obama is approaching $11.5 trillion. At 3% interest the yearly payment on this would be $345 billion. If we had to pay 5% the payment would be $575 billion. Let us hope we can keep it around 3% and ask this question. If we did not have to pay interest on the national debt what could we then do with an extra $345 billion year after year?

Here are a few things:

We could give a yearly tax refund of over $4000 to each person who pays federal income taxes.
We could buy a brand new Ford Focus for 21.5 million families and deliver them free to their door. This exceeds the number of cars, trucks and SUV's sold in 2008, which was just over 16 million.
Or, if we wanted to create a lower carbon footprint we could replace those 16 million vehicles with a new Prius, free of charge.

Obviously, the interest on the national debt could save the car industry many times over and supply every family in America with all the new cars they normally buy. Instead of buying them, however, we could have them delivered free of charge. If we could spend the interest from the national debt on ourselves we could give ourselves some nice bonuses.

We could buy health insurance for all the 46 million people in the country that do not have it. My health insurance at the age of 64 costs me around $2000 a year through Blue Cross. If we spent this same amount on the 46 million uninsured the cost would only be $92 billion a year. This would leave us $253 billion a year to play around with while leaving no one uninsured.
We could build almost 1,670,702 new homes around the median price of $206,500 (as of the end of 2008) and just give them away if we wanted. There were 482,000 new homes sold in 2008. This means the interest on the national debt could buy three and a half times the total amount of new homes we have been building.
There was a 7.6% unemployment rate in January 2009 for a total of 11.6 million people. We could send each of these a check in the mail for $30,000 to tide them by.

I think that's enough to get the idea across. $345 billion a year is a lot of money. On the other hand, it's just peanuts when compared to a National Debt of $11.5 trillion. The problem with this figure is that this is actually owed by us and we need to pay down on this principle if we are to reduce our payment.

This debt amounts to over $38,000 for every man, woman and child in the United States. A family of four owes over $150,000 as the part of their debt.

Because of our tremendous debt, a rescue package that increases the debt is not a rescue package, but a "dig-our-own-graves" package.

Does it make any sense for a family that is deeply in debt to max out their credit cards to pay bills when maybe a little thrift would save then from bankruptcy?

I think not.

Obviously the first part of any plan to fix this country financially is to cease and desist from going any further in debt. The only excuse for going further in debt would be if our national survival is at stake as happened in World War II.

There are two ways to put a halt to going further in debt. The first is to decrease spending and the second is to increase the government's revenue. Since the government gets most of its revenue through taxation most people would rather concentrate on the first alternative -- decreasing spending.

The question then is how is this to be accomplished for it seems that whenever a cut is suggested all hell breaks loose. Every government agency and bureaucrat fights tooth and nail to increase, not decrease spending. Unfortunately, the major media is a willing accomplice in this, always supporting the spending and demonizing the cuts.

The annals of our financial history are littered with the dead bodies of sincere ideas to cut spending. Is it possible things could be different this time?

Yes. With the right focus, there is nothing too good to be true.