US National Debt Myth Busters Part I: Never Put Off Until Tomorrow What You Can Do Today

Michael McTague  |

“Never put off until tomorrow what you can do today” -- Part I

This well-known bit of homespun advice resonates with millions across the centuries. The American spirit calls for long work hours and tackling impossible tasks to hit the deadline. About 90% of Americans work more than 40 hours a week.

In the current struggle over the national debt, this long-standing myth resonates with but not all. Last September, referring to the national debt, President Obama said on David Letterman’s show: “We don't have to worry about it short term…. but it is a problem long term.” Given the multi-trillion dollar size of the national debt, we are putting it off until tomorrow. Because of the complexity of this topic, the myth will be examined in three separate articles. In the hallowed myth buster tradition, these articles examine whether this myth endures.

Growth of the U.S. Government

The U.S. government grows at an extraordinary rate. The national debt is tied to the massive annual deficit, which now runs at a trillion dollars. And yet the government keeps growing. Can these annual budget deficits be remedied? Even a cursory look at the situation shows that much of the federal budget cannot be controlled. The government uses the terms “discretionary” and “mandatory” spending to refer to parts of the budget. Theoretically, the mandatory parts cannot be limited; only the discretionary parts of federal spending can. But what does discretionary spending refer to? It covers military spending and many other non-military expenditures that require a budget including interest on the public debt. Practically speaking, these areas cannot be limited.

Consider military spending. It is tempting to think that no major war is underway and that the US could cut back on what it spends to keep millions of personnel and a great deal of equipment running. Such budget slashing would cut into the size of the active military and the vast array of expensive weapons systems. Surely a pair of budget scissors could easily snip away at approximately 1.5 million active military and roughly 750,000 reservists. How about mothballing a few of the 15,000 aircraft, including 20 stealth bombers (It’s amazing statistics are available on stealth bombers!) and more than 1,000 Navy ships. Almost 250,000 people are stationed outside the US. Are all of them really needed?

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Even though these numbers appear enormous for a time of relative peace, it is nearly impossible to agree on specifics if anyone tries to identify real cuts. Thirteen bases operate near Afghanistan; all are said to be critical. Previous attempts to cut back on installations inside the US also went sour. For example, Fort Bragg is the largest Army installation in the world, home to about 43,000 military and 8,000 civilian personnel. Could this single installation be closed and everyone sent home? Here is why this is not feasible. If Fort Bragg were really closed, more than 50,000 people would be unemployed. As any veteran knows, forts and bases inspire the local economy. Imagine all of the business owners and real estate agents who would suddenly find the bottom falling in on their income. Picture the outcry if this single fort were shut down. Even in peacetime, the military is very large and plays a critical role in the economy.

For this discussion, note that discretionary spending is not so discretionary. No one can stop military spending. Discretionary spending in the FY 2013 budget was trimmed slightly to $1.264 trillion. Amazingly interest on the national debt is “discretionary” because it requires an annual budget. Just try snipping that. Mandatory spending is also growing and theoretically even more difficult to control.

Dependency on Government

The second reason why Washington is not abiding by the myth lies in a growing dependency on government. The dependency is implied in the growth of government itself. Cuts are impossible. No one can or wants to suggest removing any critical government services. If this were not the case, government growth could be slashed as quickly as soldiers return to civilian life at the end of a major war.

Consider higher education and how dependent the nation has become on government's role. According to data from NCES, in 1965 about 4 million students attended public colleges in the US, while about 2 million attended private colleges. By 2013, public college attendance had swelled to nearly 16 million and private college enrollment to 6 million. Despite the wide availability of Pell grants for public and private college students and low-interest government supported loans, public colleges outpace private colleges in enrollment growth. To focus on the public sector, there are more than two and a half times the number of students attending public higher education now as there were all (public and private) college students in 1965. Also, the split between public and private has widened strongly in favor of public colleges. College is a good thing and highly desirable for the nation. It is also a major undertaking and quite expensive. The education dependency came about with the best of intentions, and it has grown enormously.

While the nation puts off facing its debt, the pattern will lead to a crisis. But the issue is not being faced. The first two reasons – the growth of government and our expanding dependency on the government – make it nearly impossible to put off facing the national debt. This myth is alive and well and gives us cause to think about the future. Next month in Part II we will look at two other compelling reasons why we are so reluctant to do today what we prefer to put off until tomorrow.

Michael McTague, Ph.D. is Executive Senior Vice President at Able Global Partners in New York.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not necessarily represent the views of Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to:


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