There has been a lot of talk lately about the imminent reduction in the funding of our social welfare programs. Is that a bad thing? Yes. Can we do anything about it? Not really. Could it be a good thing? Maybe, but only if it means the rest of government is reduced, and it learns to live on a balanced budget. In our personal lives, we can’t spend more than we bring home. Yes, we have credit, but if the credit payment fits into your budget, then you’re ok. The government has credit, too. The problem with their credit is that the payments cannot currently fit into a balanced budget. It makes the payments, pays the rest of its bills, and then borrows more today to cover what it overspent yesterday. That’s what a deficit is. The amount of money our government has to borrow to cover the funding of everything it says it will fund.
How does the government get its funding? Our government gets the bulk of its money from the taxes we pay. That is its “paycheck”. If that money is not enough to cover what they have planned, they borrow money. This is done by selling pieces of the government in the form of Treasury bonds, notes, etc. You can even buy one! You buy a bond for $50 and, in ten years, the government will pay you back $100. For those ten years, you are letting the government borrow your $50. These bonds are sold to individuals (you and me), corporations, associations, public and private organizations, and other governments. Yep, other governments. In 2014, (the most recent data I could find) China owned 7.2% of our nation’s debt. 27.2% was owned by a mix of other countries to include, but not limited to, Ecuador, Venezuela, Iran, Iraq, and Libya. (https://www.forbes.com/sites/
mikepatton/2014/10/28/who-owns-the-most-u-s-debt/#30cfb365819c.) I think I would prefer cutbacks and the security of a balanced budget to owing countries that are cool to us at best.