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Comparing WW2 and Today in Respect to Debt
from my blog at http://theatleeappeal.com/
The Washington Post ran a story on Sunday talking about America’s debt problems. “Oh great, another story about our debt, I can’t wait!” Trust me, I feel the same way considering half of the headlines out there are debt or deficit specific. But we can’t run away from it. We are in a financial black hole that we have never found ourselves in before – at least in regards to what future economic predictions are looking like. World War 2 levels were a little higher, but our economy took off once the war was over.
First line: The daunting tower of national, state and local debt in the United States will reach a level this year unmatched just after World War II and already exceeds the size of the entire economy, according to government estimates. There are a couple big differences between now and back then, but there is one difference that needs to be looked at with a little more consideration. There was not much state and local debt in the late 40s. Why? Well, just about everything was spent on a federal level because we were engaged in the largest war the world has ever seen – which we won by completely overwhelming our enemy without regards for politically correct engagement strategies. If the current people in office today were in control back then, do you think we’d even consider dropping Fat Man and Little Boy?
Another issue is entitlement spending. Even with FDR’s New Deal, entitlement spending was paltry compared to what it is today. Harry Truman increased entitlement spending with the G.I. Bill which brought entitlement spending to a high in the late 40s of roughly 31% of total government outlays according to the Wall Street Journal. However, since the implementation of the New Deal and then Lyndon Johnson’s ”Great Society”, George Bush’s “compassionate conservatism” and Obama’s “I have a dream of spending a lot of your money”, we are now looking at entitlement spending around 64% of total government outlays. That is a 106% increase in entitlement spending in just a 60 year time span.
Now you can trace all of this back to the latest uproar in Wisconsin from government union employees – which is now spilling over into Ohio and other parts of the country. Entitlement spending is crippling budgets, and we are nearing financial turmoil because these debts are reaching such high volumes. Public union employees have been implanted with this idea that they are entitled to all sorts of retirement and health care benefits: all of which they don’t have to contribute a dime too. Our local, state, and federal governments can no longer afford to spoon feed these workers off of our tax dollars and borrowed money from abroad. Entitlement states, once implemented, are extremely hard to turn around without civil unrest. Just ask Greece.
Views: 44
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Comment by Stephen Cargile on February 26, 2011 at 4:30pm
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Sacrificing is definitely not the answer. Sacrificing will only make the Citizenry the enablers to allow career politicians to maintain the status quo without mandatory reforms. It must be made clear once and for all that 80-odd years of plundering of the public till under the Progressive, New Deal, Great Society and Obama-care names are at an end. Besides, how much sacrifice could possible be "stolen" from the Citizenry at this point? It would require massive confiscation to mitigate the trillions of known debt - nevermind the fact that we all know that magical fairy tale government programs always cost more than planned.
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With Americans purchasing War Bonds and Stamps ("Any Bonds Today?" asked the famous song), we owned the debt in-house unlike today where are at the mercy of the very nation we saved from the Japanese. Through the Series E Bonds one could spend $18.25 for a $25 War Bond which had to be held for years. Roosevelt and Morganthau instituted the "Victory Tax" in 1943 as well which, along the with bonds, helped to stem the threat of choking inflation like the one that befell the nation after WW1. At least FDR refused to fund The War through taxes alone though he did declare flat out that nobody in the country should be bringing home more than $25,000 per year dismissing any qualifiers of labor and self-initiative. The great irony was that while the Liberal New Dealers were in charge of rationing (read: what people needed), FDR was forced to rely on Conservative dollar-a-year business men to actually BE the Arsenal of Democracy. The economy of 1945 was strong enough to withstand the pressure of The War, the debt and the reconversion back to a peacetime economy. I do not see parallel contemporary evidence that today's economy has the same horsepower and flexibility which makes Obama's debt a greater threat.
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Comment by tamara stephenson on February 23, 2011 at 9:39am
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What a novel idea -- when you engage in a war, you pay for it. that certainly hasn't happened in the last 10 years. How much money are we spending in Afghanistan every day, with no end in sight.
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Comment by David Atlee on February 23, 2011 at 8:15am
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True, the top tax rates were through the roof back then - but that was in part to help with the cost of WW2 - and also hardly anyone made enough money to reach that rate.
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Unfortunately, I think you're right.
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After the retiring baby boomers are no longer a massive voting block more than likely.
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the big bloodsucker in our budget is Medicare, Medicare, Medicare. when will one of our leaders acknowledge it?
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