Gerald Staack | $33 Trillion Debt? So What?

Letters to the Editor
Letters to the Editor

Republicans in Congress want to scare you that debt is bad for our country. They want to scare liberals from offering the working class what it wants, i.e. tuition-free education, Medicare for all, child care support for working mothers, and a comprehensive climate crisis policy. Their super-rich constituents are hell-bent on not spending money on things the working class needs to live comfortably in a civil society.

The fact is that debt is good, and according to Lisa Smith, the author of “Five Ways Government Reduces National Debt,” debt has been part of our country’s way of providing social improvements since we became a country. There never was, nor is, such a thing as “pay-back.” Conservative oligarchs, not empathetic to paying higher taxes for social necessities, want you to believe there is a burden of payback. Our country has, however, “never” paid anything back to the federal reserve. The institution prints our money; fed payback is an oxymoron — not done! It’s not as if you or I go to the bank and borrow money. That must be repaid with interest. The words, “indebted to the Fed” are a misnomer since no monetary payback means there is no indebtedness. The U.S. government receives money from the Fed to cover budget gap shortfalls that may occur while running our country.

However, the government has one public debt-paying commitment: It is to pay back principle and interest to buyers of its Treasury Bills. This is money the U.S. government needs to cover budget gaps when spending exceeds tax revenue income. The government asks the Fed to print more money if there are insufficient T-bill buyers. It’s as simple as that! 

The only question often asked is, does printing money cause any significant inflation?

The answer can be found in the International Monetary Fund Working Papers published June 2023, saying, “in advanced economies like the U.S., long-term national debt has little or only a modest effect on inflation.” So what does paying taxes do for us, the average American family? It pays for the debt held by the public and the operation of our nation.

Paying higher taxes diminishes public debt while paying lower taxes allows the public debt gap to grow. “National debt” is the amount the government had to borrow throughout our nation’s history for intragovernmental holdings, e.g. highways, infrastructure, public schools, the armed forces, NASA, parks, etc.

Donald Trump allowed the rich a $1.5 trillion tax break that created a higher tax deficit. This burdened society to cover the deficit, the money needed to manage our country. This type of giveaway reduces the ability of American workers to live more comfortably. There is less money for the things they need.

It’s time to stop listening to the Republican establishment if you want to improve life for yourself, your family, and your friends. The far right is only interested in ridiculing liberal policies so their oligarchs keep funding them. Placing society’s desires on the backburners doesn’t make America great again. It makes life in America less tolerable. It’s time to allow both houses of the Legislature to have a Democratic majority.

Gerald Staack

Former Santa Clarita resident

Wilmington, North Carolina

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