It wasn’t that long ago that the “smart” thing was to take on debt. But not anymore. It’s no surprise that people today fear being crushed by debt. But for our own and our country’s well being, we need to put government debt into perspective.
First, frugality is certainly a virtue, and buying only what you can pay for from cash on hand is often, but not always, prudent. Many of us have used home, automobile, business and student loans. In most cases, those were not bad decisions, even though it took years or even decades to pay them off.
Our federal government is borrowing now to get us through an economic crisis with our country and its people and institutions intact. It is also investing to build for the future. If we are so worried about debt that we fail to invest in people’s education, skills and health, this country will certainly be the poorer for it.
Second, unfortunately, we have coasted for generations on infrastructure and institutions our grandparents built, crucial investments such as the Golden Gate Bridge and the Hoover Dam. These things are our real wealth. If we continue to let our roads, educational system, and other infrastructure crumble, if we do not have modern transportation, communications and science, we and our children will not be truly safe and secure.
We must make a commitment to build and improve, as prior generations have, even though we do not have the cash on hand now. We stand to lose far more than we gain if fear of debt leaves us with irreparably damaged power, water and sewage systems. We also need to bear in mind that government’s very long life span gives them time and many options to pay off debt.
Third, debt or decline are not our only choices. We can tap sources of revenue that actually create a fairer tax system. Changes to tax law in recent decades have let the wealthiest among us pay an increasingly smaller percentage of their income as taxes. Income taxes paid by the top 400 taxpayers have been cut in half since 1995. As a result, in 2007, the most recent year for which we have information, every one of these super-rich received a tax cut of $46 million. Had just these 400 people paid taxes at the rates in effect before those tax cuts, the federal budget would have an additional $18,400,000,000 each year and not be worrying about debt. And that’s just 400 of the super-rich.
The extraordinarily wealthy who get these tax breaks may honestly think they deserve to keep every penny they have because they believe they are self-made people. But they didn’t do it alone. They owe their wealth to this country’s public infrastructure, for which all of us have paid. This includes the roads on which their employees drive to work, a public education system to train their workers, police, courts and our system of laws. It is easy to forget that people like to do business in the United States because the legal system we paid for means their contracts are enforced. It is time they paid their fair share.
Ask yourself: Is our country better off with a tax system in which the richest do not pay their fair share while so many of us are financially struggling? Are we, as a people, better off now than in the decades when tax burdens were fairer as during the Eisenhower administration? The decades when the richest stepped up to the plate were the years when we had full employment and built things in this country.
We are all in this together. Only when all of us share this obligation of citizenship can any of us be truly safe and secure.