Debt...Practical vs Impractical

When the president took office over a year ago, he inherited many things. One issue was the growing deficit. Spending during the Bush administration had dug a big hole in the deficit. Unfortunately, due to the rough economic times more was added to the deficit for bailout money and when this health care legislation becomes a bill; it will add more to the deficit. But, many complain that we must stop now. Spending must cease in a recession. People were not losing control and paying attention to spending at various points in the last ten years. So, that brings me to ask: what is smart debt and what is not smart debt? What is practical spending and what is impractical spending?

Many might not realize it or are so geared into the problems we have today, but a decade ago we had a surplus. Our national debt was not a problem. That is until we enter one war. Then another. Then while doing that we had multiple tax cuts. A sort of perfect storm for erasing any surplus and taking us a down a bad path.

How then, do we do anything with that mix causing a growing deficit? Running deficits, for one, during a time of high unemployment like we face is a good thing. Throughout the world, trillions of dollars have been invested in the global economy in order to prevent an epic collapse. We are seeing growth a year later. The stimulus is still slowly being implemented; as it was planned to do. After discussions, we will probably see a second bill under Obama come to the table as more money still needs to be put into the system despite the deficit we have.

People see the stimulus bills as one way that they are forced to spend more and they "only add to our problem". The question that many ask, though, is where money should be spent and how will that affect their taxes. Big government vs small government is a common argument between the parties and their constituents. Whether people like, right now we need big government; with controlled spending.

Health care has taken a lot of heat in the last year as something we don't need reformed if it will add to the growing deficit. The more people who are not insured will grow through losing their jobs or because their employers will slowly find harder and harder to maintain such benefits. With the reform that has been laid out, businesses; especially small businesses; will have an outlet and assistance in providing for their employers without losing an arm and a leg. Social security is not what it used to be and the baby boomers will be the last to reap it to the fullest if things are not changed and fixed. Both health care and subsequently Medicare alongside with Social Security affect the older generation (60+). Those are the individuals who have paid into the government for decades in order to live a reasonable life after retiring.

Some like Congressman Paul Ryan (R) of Wisconsin have outlined making Medicare a voucher program and privatizing Social Security to some degree. However, despite what might seem like a genuine effort to fix the problems; these are not the solutions. Involved in his thought process is tax cuts; not to mention that weakening our social services does us no good if things were to get worse.

In addition to social services, our infrastructure and schools are always in need of attention and money invested in both. More time invested in both will restore our country and put us and the future lawyers, politicians, and CEOs on the right track to success.

These are issues and things that can be addressed regardless of our tough economic. E.J. Dionne provides us with three suggestions moving forward regarding how we should address spending.

1) Starting not with entitlements but with a broader assessment of what will need the government to address over the next two decades. There is a need to be frank about where the money is going to go in terms of national defense and entitlements.

2) Offering a selection of the fairest and most economically efficient ways to raise the needed revenue.

3) Proposing a capital budget for the federal government in order that debt is used the way it is supposed to.

What must always be taken into consideration is the fact that borrowing in tough economic times in order to cover the government's daily costs is not smart. However, as we see in both the health care legislation and the stimulus bills; the spending and the financing are meant to take place over time.

We have added to our national deficit through spending without paying and proper allocations. If we set the proper framework for spending moving forward, we can alleviate problems, stabilize the deficit, and allow for it to slowly decrease.

Debt can be smart. And debt can be foolish. Debt can be practical. And debt can be impractical. Lawmakers and us as citizens need to know the difference and make educated decisions.