James Grant's article in TIME magazine sets the national debt at $13.9 trillion. Recently we've been hearing, from Republican candidates especially, that it's more like eighteen, bordering on nineteen trillion, and it's all the fault of big government and social programs. James Grant subtracts the amount we owe ourselves, the money we owe in T-bills etc. which will eventually come due.

We have approximately 320 million people, and Grant sets the price tag each of us owe at $42,998.12. That includes the 47% who don't pay income taxes. Thomas Picketty, author of CAPITAL IN THE 21st CENTURY claims we could pay it off via austerity, inflation, or taxing capital. His favorite is the last because much of that money was acquired via inheritance; i.e. the Sam Walton family is worth something like 160 billion dollars. Many of them live on the interest. If you have a good financial expert investing your money, you can expect to make six percent per year. Picketty doesn't want the capital itself; he wants a chunk of the interest. Inflation has worked for France after WWII; ideally we could reduce the debt if inflation held at five percent, but we've seen inflation run amuck during the Carter/Reagan years when it was around 22%, so we don't really want to go there. Europe and the Republican party like austerity. Cut those freeloading social programs, try a bait and switch like giving your people the option to invest their own social security money. (That would kill social security, and they know it.) Well, austerity didn't work in Europe; they've had three recessions since Obama's stimulus program. They're down to negative interest with their equivalent of our Fed. Besides, social programs will be self sustaining if the cap is raised to around $200,000, mere pocket change for the Waltons and their ilk. Also we're paying interest on that debt, which takes another big chunk out of government revenue. Let me interrupt here to talk about what would happen if we did what the Tea Party wanted us to do. They refused to raise the cap on the national debt, until John Boehner threatened to resign before he did resign. If we hadn't raised the cap on the debt, we wouldn't have been able to pay our bills and our credit rating would have suffered. China wouldn't give us any more money. Wall Street would have taken a dive, plunging us back into a recession. Was that their goal in the first place? Or do they just do things without considering the consequences? Then there's defense, which took about $800 billion prior to the Sequester. The Republicans have been trying to get it back up there ever since. We really need a billion dollar submarine to fight a bunch of camel jockeys. Eisenhower warned against the military industrial complex when he left office, and it's worse than ever.

Another factor democrats don't mention as often as they should is income tax cuts. In other words the Republicans, claiming lower taxes for the rich will mean more jobs, keep cutting corporate and individual taxes for the rich. It's called “trickle down” and economists have shown it doesn't work. When Reagan took office the top tax bracket was 70%; he reduced it to 28%; when the economy got worse, he had to raise taxes again, but not anywhere near 70%. George Bush lowered them again in 2000. He was so set on lowering taxes he wouldn't even raise them when he was fighting two wars simultaneously. Who knows how many trillions that added to the national debt. Economists and politicians differ, but we're still paying it. The highest tax bracket is now 35%, not high enough if you're looking at a progressive income tax. 85 of the richest billionaires have as much money as the lowest fifty percent in the United States. You get the money from the people who have it. You can't squeeze blood out of a turnip. Excuse the cliché, but it's appropriate.

Okay, so Republicans would like to get rid of the corporate tax altogether and they'd like to get the individual income tax down to 25% for the highest bracket, at least John Kasich would. The Chinese have more billionaires than the United States, but unless they're getting some kind of under the table deal from the government, they're paying at least 50% in income taxes. As Warren Buffet says when he asks a billionaire to give half his money to the poor, and the person is reluctant: “You still have five hundred million dollars left!” Buffett gave 99% of his money to the Gates Foundation; Bill Gates gave away 97% of his. Bill Gates is still the richest man in the world. How does he do that? Let's just say the rich don't need the kind of help they're getting from the elephant party.

Let's start paying off that debt by balancing the budget. We raise the social security retirement age (it's 62 for partial payment and 66 or 67 for full payment) now. Let's raise it to 64 for partial and 70 for full. We're living longer after all. It makes sense. Let's investigate disability claims. Billions are stolen every year by people who aren't disabled. Let's cut the defense budget gradually, so it doesn't hurt the big weapons manufacturers too much. After all, China is only spending a hundred billion, and they don't look too helpless. Let's form a bi-partisan committee to fix our tax system; cutting taxes for the rich by 42% was an asinine move. The biggest complainers are people who get the money they pay in taxes back in the spring with a refund. Get rid of all those ridiculous loopholes and hunt down the tax havens. If you have to, appoint somebody like Liz Warren to do it. Quit trying to pretend you're not denying the government any revenue. A country with a diversified population of 320 million people needs a big government. We can't go back to the Articles of Confederation. If the government were reduced to the size Republicans want, America would become another Middle East.

Obama formed a bi-partisan committee at the beginning of his term to create a budget. It came to nothing because of politics. The kind of committee I'm talking about must have assurance it will be taken seriously by Congress. How about a national referendum? If the people say the committee's recommendations should become law, they should become law. Obstruction is obstruction. It should not be allowed.

P.S. Did you know that Japan's debt is 227.9% of its GNP; the United Kingdom's is 90.6%; good old Germany, which gets such good press, is at 71.7%, not too much better than the U.S., which is at 73.6%. The reason Japan's is so high is because for the last twenty years or so they've been trying to fix it via austerity measures. Only recently have they tried stimulus programs.

* The above statistics come from James Grant's article.  

**Correction: It took me over a month to read Picketty's book. Pretty sure he wanted a small tax on capital itself. which would include money, stocks and bonds, other investments and real estate.

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