A Trillion Here, a Trillion There...

For the United States, yesterday's "a billion dollars here" is today's "a trillion dollars there."  We owe over fourteen trillion dollars -- that is a "14" followed by "000,000,000,000."  Each man, woman or child in America today owes about forty thousand dollars - their share of our national debt.  Senator Everett Dirksen was right: "eventually, it becomes a lot of money."

For many, the 1950s are remembered as almost a golden age epitomized by Ozzie and Harriet living the good life.  They benefited from America's industrial might escaping WWII's devastation and returning to peacetime production; excess capacity could even go toward waging the Cold War.  Our workforce was plentiful thanks to Rosie the Riveter.  Working in innovative factories -- nourished by capital -- we converted our trove of natural resources into valuable products, sold worldwide.

With less than five percent of the world population, we still produce almost a quarter of the world's goods and services.  We feed many overseas.  People still flock to the United States.  Our educational system nourish minds that patent inventions and garner the vast majority of the Nobel Prizes awarded.  But we now worry whether America is in decline as we learn the scope of our debt and obligations.  We see comparisons to Greece and hear questions about the future of Democracy.  Will we go bankrupt, or be forced to learn Chinese?   

In the ongoing debate about the debt ceiling, a few structural problems -- and solutions -- at the trillion-dollar level need restatement, because they add up.

Consider energy.  It is the driving force behind life, whether powering a home or an entire industry.  The U.S. may soon be known as the Saudi Arabia of carbon-based fuels: coal, gas, shale, and oil.  But many say "not in my back yard," seemingly content to continually send almost a trillion dollars to other countries each year for their oil.  In the midst of the Great Recession, new, well-paying energy jobs are desperately needed by the Americans who would fill them, yet we are barely moving on this front.

The U.S. invented nuclear power; the first reactor was built in a squash court under a Chicago stadium.  There are those who caution against polluting our world with CO2 -- well, nuclear plants have a carbon footprint of zero.  Building about four hundred of them -- each producing a billion watts of electrical power -- would meet the country's entire electrical power needs and then some.  Again, the jobs created would be here, with a long-term, economic benefit felt for decades, and the impact on global warming would be a bonus.  The cost?  Perhaps a trillion dollars -- but we'd have something tangible to show for it.

And while we are considering electricity, note that the national grid is inadequate.  Here we have more money that needs to be spent -- but again, we'd have something afterward to show for it, including all those jobs while the work is underway.  We as a nation can invest money to build for both immediate impact and a long-term benefit.  We must.

Government has exploded, but it still cannot pick "winners."  Just consider our "Energy Department."  Do we have an energy policy to ensure that we become energy-independent?     Certainly we have banned the 100-watt incandescent bulb.  This has closed U.S. factories and opened Chinese ones.  It fuels controversy: broken bulbs contain poisonous mercury, are twenty times more expensive, provide lower-quality light, and have suspect energy consumption forecasts.  We cannot continue to pour money into pursuits whose economic justification is based upon faith -- as is the case for a "green" -- i.e., renewable -- energy system dependent on continuing government subsidies.

Even President Obama has learned the truth of "shovel-ready projects."  It is no longer possible to get industrial projects off the ground quickly, so we cannot easily achieve the benefits of producing things of value -- which includes employing people.  

This recession is illustrating the enormous size of federal, state, and local governments, not to mention the fact that these entities do not drive the economy forward.   Every five private-sector workers support two public-sector ones -- including their future pensions.  Add to all this the cost of regulation -- annually near two trillion dollars.  This thousands-of-dollars-per-worker "hidden tax" hits small firms at twice the rate at which it hits large ones.  This insidious "expense" is more than the average annual salary in some overseas nations and thus a significant impetus to move jobs to those places.  If our government's size is reduced, so will its urge to regulate at the "nit" level.  It too often loses the forest for the trees -- e.g., missing the housing bubble.

When we write of government growth, we must examine the Big-3 entitlements: Medicare, Medicaid, and Social Security.  In 1965, the House Ways and Means Committee estimated that the hospital insurance portion of the program, Part A, would cost about $9 billion annually by 1990.  Actual spending then was $67 billion.  The record is worse for other portions of this Act, which has grown as other obligations have been added.  Part of the program's growth is simply attributable to theft.  Senator Tom Coburn (R-Okla.) -- an OB-GYN himself -- estimates that Medicare pays out $80 billion fraudulently each year.  All told, the two programs now account for 23% of the federal budget -- some $793 billion.

Social Security is different, but the same.  Originally, the program was self-funded, with contributions from individuals and firms put into a trust fund.  That account today contains an IOU for $2.6 trillion.  This represents the government owing itself.  This accounting trick is certainly useful for the politicians who wanted to spend the money, but it offers scant reassurance that the money will be there tomorrow.

The image of Americans circa the '50s is of men and women who were in shape from doing things, like rebuilding a car engine.  Today, our children are fat, gorged on cheeseburgers eaten while playing their video games.  Half the country pays no federal taxes, and they're content to be supported by the other half.  The newest U.S. agency, the TSA, now has over 50,000 employees, with many engaged in putting their hands on others' private regions.  Our laws are written as multi-thousand-page behemoths, opaque to our citizens awaiting bureaucrats' implementations.

Our nation needs to build for its future, and not just build a debt that expands the bureaucracy.  We must examine the value of the many services provided by the government and determine whether they create.  We must change our attitude to that of engineers': think, choose, and then create.  The American Dream has always been ahead of us -- and it has always begun with a reality addressed by energy and creativity.

(Editor's note: We each owe some $40,000, not the $250,000-$500,000 originally written.  The error has been corrected.)

For the United States, yesterday's "a billion dollars here" is today's "a trillion dollars there."  We owe over fourteen trillion dollars -- that is a "14" followed by "000,000,000,000."  Each man, woman or child in America today owes about forty thousand dollars - their share of our national debt.  Senator Everett Dirksen was right: "eventually, it becomes a lot of money."

For many, the 1950s are remembered as almost a golden age epitomized by Ozzie and Harriet living the good life.  They benefited from America's industrial might escaping WWII's devastation and returning to peacetime production; excess capacity could even go toward waging the Cold War.  Our workforce was plentiful thanks to Rosie the Riveter.  Working in innovative factories -- nourished by capital -- we converted our trove of natural resources into valuable products, sold worldwide.

With less than five percent of the world population, we still produce almost a quarter of the world's goods and services.  We feed many overseas.  People still flock to the United States.  Our educational system nourish minds that patent inventions and garner the vast majority of the Nobel Prizes awarded.  But we now worry whether America is in decline as we learn the scope of our debt and obligations.  We see comparisons to Greece and hear questions about the future of Democracy.  Will we go bankrupt, or be forced to learn Chinese?   

In the ongoing debate about the debt ceiling, a few structural problems -- and solutions -- at the trillion-dollar level need restatement, because they add up.

Consider energy.  It is the driving force behind life, whether powering a home or an entire industry.  The U.S. may soon be known as the Saudi Arabia of carbon-based fuels: coal, gas, shale, and oil.  But many say "not in my back yard," seemingly content to continually send almost a trillion dollars to other countries each year for their oil.  In the midst of the Great Recession, new, well-paying energy jobs are desperately needed by the Americans who would fill them, yet we are barely moving on this front.

The U.S. invented nuclear power; the first reactor was built in a squash court under a Chicago stadium.  There are those who caution against polluting our world with CO2 -- well, nuclear plants have a carbon footprint of zero.  Building about four hundred of them -- each producing a billion watts of electrical power -- would meet the country's entire electrical power needs and then some.  Again, the jobs created would be here, with a long-term, economic benefit felt for decades, and the impact on global warming would be a bonus.  The cost?  Perhaps a trillion dollars -- but we'd have something tangible to show for it.

And while we are considering electricity, note that the national grid is inadequate.  Here we have more money that needs to be spent -- but again, we'd have something afterward to show for it, including all those jobs while the work is underway.  We as a nation can invest money to build for both immediate impact and a long-term benefit.  We must.

Government has exploded, but it still cannot pick "winners."  Just consider our "Energy Department."  Do we have an energy policy to ensure that we become energy-independent?     Certainly we have banned the 100-watt incandescent bulb.  This has closed U.S. factories and opened Chinese ones.  It fuels controversy: broken bulbs contain poisonous mercury, are twenty times more expensive, provide lower-quality light, and have suspect energy consumption forecasts.  We cannot continue to pour money into pursuits whose economic justification is based upon faith -- as is the case for a "green" -- i.e., renewable -- energy system dependent on continuing government subsidies.

Even President Obama has learned the truth of "shovel-ready projects."  It is no longer possible to get industrial projects off the ground quickly, so we cannot easily achieve the benefits of producing things of value -- which includes employing people.  

This recession is illustrating the enormous size of federal, state, and local governments, not to mention the fact that these entities do not drive the economy forward.   Every five private-sector workers support two public-sector ones -- including their future pensions.  Add to all this the cost of regulation -- annually near two trillion dollars.  This thousands-of-dollars-per-worker "hidden tax" hits small firms at twice the rate at which it hits large ones.  This insidious "expense" is more than the average annual salary in some overseas nations and thus a significant impetus to move jobs to those places.  If our government's size is reduced, so will its urge to regulate at the "nit" level.  It too often loses the forest for the trees -- e.g., missing the housing bubble.

When we write of government growth, we must examine the Big-3 entitlements: Medicare, Medicaid, and Social Security.  In 1965, the House Ways and Means Committee estimated that the hospital insurance portion of the program, Part A, would cost about $9 billion annually by 1990.  Actual spending then was $67 billion.  The record is worse for other portions of this Act, which has grown as other obligations have been added.  Part of the program's growth is simply attributable to theft.  Senator Tom Coburn (R-Okla.) -- an OB-GYN himself -- estimates that Medicare pays out $80 billion fraudulently each year.  All told, the two programs now account for 23% of the federal budget -- some $793 billion.

Social Security is different, but the same.  Originally, the program was self-funded, with contributions from individuals and firms put into a trust fund.  That account today contains an IOU for $2.6 trillion.  This represents the government owing itself.  This accounting trick is certainly useful for the politicians who wanted to spend the money, but it offers scant reassurance that the money will be there tomorrow.

The image of Americans circa the '50s is of men and women who were in shape from doing things, like rebuilding a car engine.  Today, our children are fat, gorged on cheeseburgers eaten while playing their video games.  Half the country pays no federal taxes, and they're content to be supported by the other half.  The newest U.S. agency, the TSA, now has over 50,000 employees, with many engaged in putting their hands on others' private regions.  Our laws are written as multi-thousand-page behemoths, opaque to our citizens awaiting bureaucrats' implementations.

Our nation needs to build for its future, and not just build a debt that expands the bureaucracy.  We must examine the value of the many services provided by the government and determine whether they create.  We must change our attitude to that of engineers': think, choose, and then create.  The American Dream has always been ahead of us -- and it has always begun with a reality addressed by energy and creativity.

(Editor's note: We each owe some $40,000, not the $250,000-$500,000 originally written.  The error has been corrected.)

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