The Daily Gamecock

Borrowing money alone can't fix national budget

Congress must observe basic financial norms

America is currently facing a debt crisis — we’ve been borrowing a lot of money for a long time, and lenders are becoming more and more wary of giving us more money. When a college student faces a debt crisis (i.e., their friends and family won’t lend them any more money and they’re about to max out their credit cards), they take a good hard look at their personal budget and make some tough choices. Let’s do the same thing with the federal budget.

We’ll take a $100 sample of Federal spending, in order to make the numbers easier to understand and compare. The largest section of the budget is “mandatory spending” — money that the Government is required to spend, by law. This section is made up of Medicare and Medicaid (combining for $23), Social Security ($22), interest on the debt ($6), and other programs like Food Stamps and Unemployment combine for another $13. Mandatory spending totals at $64.

The remaining $36 goes to “discretionary spending” — programs and agencies that the President and his advisors can decide to increase or decrease spending in. The biggest item in this category is the military, at $19. Roads get $2.14, education gets $1.62, police, courts, and prisons together get $.88. Everything else the government does (from the National Park service to the Transportation Security Administration) combines for about $12 and change.

Out of this $100 sample, $71 was collected in taxes and other forms of Federal income. The other $29 was borrowed from the American people and the Chinese Government, among others.

If we want to balance the budget so that we no longer have to borrow money, we can cut total spending so we get down to the current $71 level that is covered by revenue, or we can increase taxes so that the $71 in revenue rises to $100 to cover all expenses, or some combination of both.

A family can’t get loans to cover a fourth or more of their expenses year after year — eventually, people and banks will stop lending them money, and they’ll be forced to declare bankruptcy. Our government can’t continue to rack up debt either, for the same reason. If families across America can understand it, if we as college students can understand it, why can’t Congress?

No one wants to see cuts to important services — how do we tell parents that the government can’t afford to pay for their children’s medications anymore? No one wants to see tax hikes — how do we tell laborers that the government is taking more of their paycheck, so now they can’t put as much food on the table? Those questions aren’t easy, but they’re certainly better than, “why didn’t America address its debt before bankruptcy forced its government to cease to exist?