Tuesday, August 25, 2009

A Trillion Here, A Trillion There

I read the other day that President Barack Obama added a billion dollars to the commodities program for school lunches. The Agriculture department has started including healthy foods like fresh vegetables and meat in their program, which I consider a good thing. Kids do better when they eat healthy food. For many kids on the free and reduced lunch program, and even for kids with from families with incomes above the cutoff points for the programs, a healthy school lunch may be the only healthy meal they get in the day. Otherwise they may be living on white flour, fat, and cheese.

But then I thought about the military budget. And the bank bailout. And the automobile bailout. And the regular tax loopholes for selected corporations and for billionaires. And the bailout for irresponsible home owners. I realized a billion dollars may or may not be a lot of money when you are talking about a national or global scale.

A thousand dollars is about the take home pay of a minimum-wage American worker. A million dollars is a thousand bundles of a thousand dollars. A billion dollars is a thousand bundles of a million dollars.

Then you have the trillion dollar bundles. It takes a thousand billions to make a trillion. And suddenly these numbers are relevant. It used to be the only economic items numbered in trillions were the national debt and the annual gross domestic product (GDP). But this year the government's budget deficit is over a trillion dollars, and next year's is expected to be over a trillion as well.

Trillion dollars. $1,000,000,000,000.00.

And suddenly the sham nature of American governance and the Obama administration has a greenish light cast upon it. A nightmarish, Herman Munster sort of light.

We are told we cannot afford a decent medical system in the United States. We can't increase the national education budget in a meaningful way [instead, the Obama administration has now tied federal education aid to evaluating teachers according to their classes' standardized test scores.] We can't afford to stop global warming.

Will you look at that budget deficit? No, poor education for poor and working class kids won't cause immediate economic collapse; we need the trillions to bail out banks that strangely resemble gambling casinos tied to loan sharks.

We can't give good dental care to everyone (ask dentists about the sorry state of dental care in the United States of America, and how much of it is from delayed treatment due to lack of money or insurance) because we are spending trillions to stop terrorists whose most spectacular military success to date was accomplished with a few thousand dollars worth of airline tickets and a few dollars worth of box cutters.

As to global warming, the only serious money spent is to subsidize corporate production of new cars (cash for clunkers).

If interest rates rise eventually, and they might even if the economy remains anemic if investors start shying away from national debt, the interest itself on the debt could soon hit a trillion a year.

Some would say this matters not. Going back to Alexander Hamilton, who himself was modeling the U.S. Treasury on the Bank of England, some believe that debt is not a problem because for every debt there is a creditor. We mostly owe our debt to ourselves (and the Chinese) the theory goes.

That is a vast simplification of a complex system. If a trillion is collected in taxes, who paid it, billionaires or minimum wage workers? If it is spent, what for, artillery or medicines? If it is owed, exactly whom do we owe it to? Who has enough money to loan that much to the U.S. government, an increasingly bad credit risk, if you ask me?

Of course, the economy could recover, military spending could be reduced, the Bush (+ lots of Democratic Congressmen like Mike Thompson) tax cuts for the rich could be repealed, and we might get a balanced budget in, say 2011.

Don't bet on it. And if history is a guide, the trillions of debt already accumulated will never be paid off.

And divide that billion dollars of new money for healthy lunches to school children by the number of children in schools in the United States. Per child, it comes to less that $20. That's not much of an increase in fresh vegetables.

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