From Congressman Morgan Griffith:
"Numbers for nerds, and other Americans who care – Part II
week in Part I, we outlined America’s spending problem using numbers based on
official data collected from the U.S. government. These numbers were provided
by David Walker, a former U.S. Comptroller General. He presented the problem as
if the U.S. was a household with an annual income of $50,502 (the median income
as of September 30, 2012) and annual expenses of $73,417, leaving a deficit of
This week’s column is about laying out various proposals under
discussion to deal with our debt and deficit problem: we can increase revenue,
cut spending, combine the two, increasing revenue while simultaneously enacting
spending cuts and other pro-growth policies, and/or use risky monetary policy.
suggest that increasing revenue (raising taxes on wealthy Americans) is the
solution to our debt and deficit problem.
In 2013, however, the federal
government is projected to spend $3.8 trillion, and it is projected that the
deficit will be under $1 trillion for the first time in four years. If we were
to take all the earnings of every millionaire, we would still be left with a
shortfall of between $100 billion and $200 billion. And the nation’s debt would
still be more than $16 trillion.
If you rely on taxes alone, you cannot
solve the nation’s debt and deficit problem without raising taxes on the middle
Others argue that cutting spending is the
solution. Some point to foreign aid, suggesting that it be cut. Foreign aid
accounts for a little over one percent of the federal budget. Others would say
cut Congress. Congress’ budget is around one-tenth of one percent. So even if
we cut these two areas completely, more would have to be done in order to curb
As mentioned in Part I, federal spending continues to surge.
David Walker once said “There has been a dramatic increase in spending under the
Obama administration. Most of it is attributable to year one of his presidency
and the stimulus … but President Obama has continued to take spending to a new
Cutting spending would require discipline and
group says that a combination of pro-growth policies, spending cuts, and tax
increases would be the best way to get the country back on track. This group
argues that, while spending must be cut, the federal government simply must
raise more revenue.
Other potential options that some in the ‘hybrid’
group support include rolling back regulations to create jobs, increase the
number of taxpayers, and, in turn, increase tax revenues, or implementing any
number of changes to the budget process in order to make it more effective.
Risky monetary policy
What many don’t
want to talk about is inflation and currency devaluation. Let me
If I borrow $1 today and pay you back after a period of
inflation, that $1 buys less. That money isn’t as valuable as the money that
you lent me. Hyper-inflation is devastating to the economy, but history has
examples of heavily indebted nations using this tactic as an effort to get out
from under the heavy burden of crippling debt.
Similar to this would be
currency devaluation. This can also lead to hyper-inflation. Both of these
options used exclusively are equivalent to or just short of a country declaring
bankruptcy. But if you have inflation or currency devaluation as part of the
package, some would argue that it is an effective means at bringing debt under
An option that relies heavily on inflation or currency
devaluation makes the country look weak, ineffective, and like a risky
investment for businesses.
Regardless of whether you
support increasing revenue, cutting spending, a hybrid approach, or even a
package with risky monetary policies, I hope we are in agreement that, at this
critical point in our nation, we cannot afford to operate without a plan,
without discipline, and without accountability.
I have tried to spell
out the possible solutions without too much bias. Those who regularly read this
column know I prefer a hybrid that is made up of spending cuts and economic and
regulatory policies that get people back to work.
In the next several
weeks, I will give specific examples of some bills and policies I think will
help our country deal with our debt and deficit problem.
As always, if
you have questions, concerns, or comments, feel free to call my Abingdon office
at 276-525-1405 or my Christiansburg office at 540-381-5671. To reach my office
by email, please visit my website at www.morgangriffith.house.gov.