It’s simple. In fact it’s so simple, you don’t even need an advanced degree from Harvard (or Yale or Princeton), like George W. Bush and Paul Krugman have. It’s something that every sane householder on Earth knows. Even John Maynard Keynes understood it. Over the long run, even the medium run, expenditures have to, on average, at most, equal revenues. It’s even better if you can save a little. In good times, save. In bad times, dip into the savings if you have to. That is real Keynesianism.
The current Keynesians in the government have forgotten the part about saving for a rainy day. They think that Keynesianism means borrowing like crazy when times are good, and borrowing lots more when times are bad. You would think that even a Nobel prize winner in economics could see the flaw in this particular line of economic “reasoning”.
We haven’t listened to common sense. We’ve listened to the uncommon sense of credentialed intellectuals who assured us that piling up debt and never paying it off, was OK as long as it was the government that was doing it. We, the people, may be stupid. That is what Barack Obama, Mitch McConnell, and the Washington establishment apparently believe. But eventually, even as stupid as we are, we just can’t help but notice, it is no longer possible to hide the fact, that WE are broke.
We are a rich nation, a rich world, wealthy beyond the most extravagant dreams of our past selves. Paying off this debt will (would) not be that difficult. Raise the retirement age a little. Do a little means testing, not much, for entitlements like social security and medicare. Get a handle on wasteful defense spending. Get rid of totally unnecessary government departments and programs like the NEA, PBS, DEA, farm subsidies, corporate welfare, etc. It’s not that hard. If it were a household or a small business in trouble trying to figure out what was necessary and what wasn’t, it would be obvious.
This is really a test of the very idea of democracy. If a people are lucky enough to have a democracy, the politicians will try to get elected by promising to give free stuff to the electorate. Voters will then presumably vote for whoever promises the most stuff. The free stuff is then provided by using the collective credit of the demos to borrow money until, as Margaret Thatcher put it, we run out of other people’s money.
That’s where we are now. Democracy is in the dock. Either we succeed in voting to pay off our debts, or we go bankrupt. If we fail to vote for fiscal sanity, or if it turns out that our votes do not matter, then democracy will have been proven to be a false god.