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The Conservative View - All about percentages

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STILWELL, Okla. -- Too many of our citizens fail to understand the importance of percentage. A few percentage points can make a huge difference in our payments for a car or a home.

I have noticed that when arranging a payment schedule many people only look at the bottom figure to see if their paycheck will cover the amount. We all should be looking at what rate of interest we will be paying and be looking for the best rate we can get.

On a personal level some people do what I have suggested, but sadly on a government level they seem to show little interest in the percentages. We all need to take the numbers of our federal government more serious because it will play an ever increasing role in our lives.

Just last month our federal government acknowledged debt exceeded the $20 trillion mark.

The debt is roughly 107 percent of our entire GDP; most conservative economists make the claim that when a nation exceeds 50 percent it is on shaky ground.

We all hear the politicians and their talking heads talk about reducing the yearly deficit, but the actual doing will be harder done than said. Year after year after year the US government spends far more money than it collects in tax revenue.  

According to the Treasury Department’s own figures, the government’s budget deficit for the first 10 months of this fiscal year (i.e. October 2016 through July 2017) was $566 billion.  

When you look at the top four line items in the US government’s budget: Social Security, Medicare, Military, and, sadly, interest on the debt, those four line items alone account for nearly NINETY PERCENT of all US government spending.

Even the thought of cutting Social Security or Medicare entitlements is political suicide, and to compound the problem 10,000 Baby Boomers join the ranks of Social Security recipients every single day.  Military spending cannot be cut because of all of the constant threats and warfare. The current White House proposal, in fact, is a 10 percent increase in military spending for the next fiscal year.  

The last big item is interest on the debt, if our nation refused to pay the interest it would cause the most severe global financial meltdown ever seen in modern history.

While some claim that we can grow ourselves out of the problem there are some percentages that we need to take a hard look at. Here’s the problem: the national debt is growing MUCH faster than the US economy. In Fiscal Year 2016, for example, the debt grew by 7.84 percent.  Yet even when including the ‘benefits’ of inflation, the US economy only grew by 2.4 percent over the same period.  

It doesn’t take a genius to see that our debt is growing three times faster than our income; this is in a time of the lowest interest rates in history. What will that number do when interest rates start to climb?

For those of us who watch the percentages we are becoming increasingly alarmed at the trend.

Too many people have the misguided idea that deficit spending can go on forever, but there will reach a point sometime in  the near future  where the lenders will stop supplying the money because they know they will never be paid.

Time is overdue for us Americans to take the percentages serious.

 

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About the Author

Russell Turner
Russell Turner was born in Tahlequah Oklahoma and has lived his entire life in rural Adair...
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About Red Dirt Report

Red Dirt Report was launched July 4, 2007 as an independent news website covering all manner of news, culture, entertainment and lifestyle stories that affect and interest Oklahoma readers and readers outside of our state. Our mission is to educate, promote civic engagement and discourse on public policy, government and politics. Our experienced journalists provided balanced in-depth coverage of news stories that affect Oklahomans. Our opinion/editorial stories come from a wide range of political view points. We carry out our mission by reporting, writing, and posting news and information. read more

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