OPINION – Even though it’s been canceled for about 20 years, I still remember some of the lessons of life that I learned while watching “The Cosby Show.”
In the episode, “You Only Hurt the One You Love,” Cliff Huxtable learned that the hospital was laying off 30 people including Mrs. Granger, the lady that cleaned the doctors’ lounge. This was a big deal to Cliff and he really didn’t want them to let her go, so he went in to talk with the hospital administrator. Cliff informed him that Mrs. Granger was very helpful and that it would be a mistake to let her go; but the administrator told him: “Unfortunately you can’t argue with math.” He said that they had to cut 30 people so if Mrs. Granger was that critical, Cliff would have to take a look at the list and find someone else to be laid off instead. When Cliff was unable to find someone else to replace Mrs. Granger as one of the 30 to be laid off, he accepted it as an unfortunate part of business.
Just like the hospital in the show, our country is facing serious budget problems. However, we are taking the wrong approach to fixing the problem. In the show, when Cliff mentioned the pain that would be caused by the loss of Mrs. Granger, the administrator told him that there was nothing that could be done unless Cliff could find somewhere else to close the gap. The administrator did not simply succumb to the idea that Mrs. Granger should keep her job and then leave a hole in the budget.
The budget problems here in the United States can be boiled down to the fact that the federal government has been spending over $1 trillion more than it brings in – every year for several years. I’d say our budget has a large gap, but our Congress hasn’t passed a budget in far too long so I’m not even sure I can say that.
As the administrator in “The Cosby Show” said, “you can’t argue with the math.” The fact is, our federal government has legislated the spending of significantly more money than it has. Therefore, the math says that we have to do something in order to make it so that those numbers match up.
There are several options that can be used to bring those numbers together. Each of these options has pros and cons. Over the last decade or so that gap in the numbers has been brought together primarily by borrowing money. According to the US Debt Clock the current debt ceiling is $16.394 trillion and our current national debt is over $16.4 trillion. In other words, we’ve reached the debt ceiling and this is currently no longer an option.
Therefore, one of our options is to change the debt ceiling and continue borrowing money at about the same rate that we’ve been borrowing. The obvious downsides to this option are the interest payments we have to make on the debt, currently over $260 billion a year and growing, and the fact that the national debt will have to be paid back at some point, perhaps by us or maybe our children. One of the not so obvious downsides is the fact that larger national debts can hurt confidence in our debt and therefore cause the interest rate on our debt to go up.
Some have suggested that there is a magical fix that President Obama and Timothy Geithner could utilize, which comes in the form of a platinum coin but, as I said, every option has it’s pros and cons. If you haven’t heard, one of the options being discussed is for the Treasury Department to mint a platinum coin and assign it a value of $1 trillion. They could then deposit it at the Federal Reserve Bank and use that $1 trillion dollars to continue spending money without borrowing any more. This keeps our national debt from growing, but at the same time this approach would likely cause inflation (there are arguments as to exactly how much, some even claim the inflation would be minimal). This, however, is nothing more than a different way to monetize the debt.
We could also try to increase revenue by increasing taxes. This has some obvious potential for hurting our economy, which is already struggling.
There is also the option of cutting spending. The potential consequences of this vary dramatically based on what exactly is cut and by how much, but there are certainly consequences.
This issue of the numbers must be figured out, but it seems like everyone is afraid to suggest any specific course of action because they don’t want the backlash that they know will come since there is a downside to every known option.
With this in mind, I’ve decided that I will take on the task of the administrator from that episode of “The Cosby Show.” Over the next two weeks, I’m going to put together my proposal of what I think would be the best way to deal with our country’s current situation. My next column, two weeks from now, will include that proposal. I will then consider all the feedback I get from readers, and adjust it if I’m enlightened by this feedback – after which, I will submit my proposal to Chris Stewart, Mike Lee, and Orrin Hatch with the hope that one or all of them can utilize part or all of the proposal to move things forward towards a better future for our country.
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