The dilemma of debt

The public debt, any public debt anywhere in the world, is a way governments can bypass democratic controls on spending and pass on the burden of funding government imperceptibly on to generations as yet unborn (when I say 'bypass democratic controls' what I mean by that is that instead of being honest with the electorate on how much we need to take in in taxes in order to spend, politicians balk at the prospect of raising taxes and instead raise debt, debt that will have to be paid at some point by those either unborn or those too young to have voted on whether to allow government to raise debt or not). It’s fucking underhanded is what it is. Usually in democratic countries, a king, a president or a prime minister, born, elected or appointed, raise money through the elected legislature (taxes) which represents us and which must approve the budget, i.e. how much money we collectively spend based on how much money we collectively take in (in taxes usually) to pay for all the spending. One assumes that one does not spend more than one takes in and if one does go over budget it should be by a very small margin, an amount that should be covered quickly in the following year's budget. Unfortunately, this is rarely the case. Debt has become an acceptable part of life, whether on a personal level or a national level. Living within one's means is now seen as rather limiting and unambitious, while being a slave to the money men is the thing to do it seems.

Bloating is a serious problem with governments that in our times have grown faster in terms of spending and outstripped growth in GDP. This state of affairs should in theory create a greater tax burden on individual citizens whose earning power has grown very little over the past years. But because our representatives in the legislature are elected every so many years they balk at the prospect of raising direct (i.e. honest) taxes too much and often argue intensely over the budget. In countries like Lebanon wrangling over the budget left us without a budget since 2005. This left the executive (the prime minister and his cabinet collectively) almost free to spend without limit or scrutiny.

This state of affairs is dangerous as we known all too well. Even if borrowing stops immediately, the debt will continue to grow as it accrues interest, but to pay off the debt we have to be productive in order to be able to pay taxes to government which go to pay for the functions of government including paying off the debt. But to grow and be productive we have to borrow more money. It’s a vicious cycle that requires political courage to stop.

A referendum can be put to the country that puts a simple question to them: ‘Do you want to pass on the public debt burden to your children’s children or do you want to pay it off immediately? If your answer is the later vote for a new tax on high income earners and corporations aimed specifically at paying off the public debt.’ Targeted taxation, specifying to the electorate what the new money raised in taxes will be spent on is the best and most honest way to deal with the people. While corporations and private enterprises may consider themselves to be dictators over their employees, they do have to recognize that they live and operate in a democratic environment and that there is a price to pay for that environment that allows them to operate freely and thrive. Will they object? Certainly, will special interests prevail over representatives and push them to squash such a tax proposal? Most likely, but ultimately the will of the vast majority of working people who do not want to burden their grand children with a bloated public debt will prevail. As Jim Hacker said in the 70s sitcom Yes Minister “We cannot go on paying ourselves more than we earn.”