What’s Right: Cut spending, control inflation
September 22, 2011 Leave a comment
by Tyler Baker
Sustainability is a concept known universally from old to young, from the East to the West. Even children at a young age show reverence to learn how to save, spend and live within their means — a concept our government has struggled with the past decade.
No, our leaders in Washington didn’t miss that much-needed moment of growth, they just abstain from practicing the common-sense habit.
This trend of spending wasn’t just another shameful event handed over from the Bush administration; spending, out-of-control spending and Social Security are to blame in a long line of irresponsibility. What the new Deficit Reduction Committee needs to focus on isn’t finding a creative way to make cuts; it needs to cut ideas that were never creative in the first place.
According to The Washington Post, the United States bought over $850 billion in treasury bonds to ensure interest rates would stay lower. Also, this move would cause over $850 billion to be “printed” to buy these bonds.
It doesn’t take an economics major to understand that buying your own debt is, again, unsustainable. Attention should also be brought to the fact that when more money is printed, the dollar is devalued and the interest rates that stagnate our economy will eventually rise.
If the committee’s goal is to cut $1.5 trillion in spending, consideration should be taken to prevent this idea from ever leaving Ben Bernanke’s office again.
According to the Congressional Budget Office, Social Security takes over one-fifth of this country’s government budget, or a total of $700 billion, every year. Social Security needs a face-lift. A transition to private accounts, or giving the states control of the program, would help.
When Social Security started in 1935, it was a 5-1 worker-to-recipient ratio, where five people worked for one recipient’s benefit. By 2020, the ratio may be down to 2-to-1, according to the Social Security Administration. This is an unsustainable program the Deficit Reduction Committee desperately needs to reform
By cleaning the treasury and privatizing Social Security, America still has a chance to clean up her act and prove why she is truly exceptional.