Debt Verses Deficit, Learn the Difference.

There is a big misinformation campaign going on by both liberals and conservatives. This the the war of debt that we see on our TV screen and in our social media, day after day.  Both sides are marketing economic soundbites for their own purpose of pushing their own agenda and it has even bleed down to the states where there is a verbal war of diarrhea going on about government spending. So who is right and who is wrong? As with many things that come out of the twisted minds of political market professionals it turns out that both sides are right and wrong. It doesn’t matter if you like Obama or hate Obama or blame Obama for global warming, sex on the beach or castrated zombies the point is the debt and deficit issue has been going on much longer than either Bush or Obama has been alive. In effect neither and both get the blame for the modern crisis we apparently, according to the GOP, not currently having.

Ok, what is the difference. To make it plain, debt is how much we owe. The deficit is the difference between how much we take in and how much we spend. These terms are NOT INTERCHANGEABLE! Not that you could tell by watching or listening to the media. They use both words to describe each and it’s little wonder that people get them confused. The point is that while they are connected they are not the same and in fact don’t tell the whole story.

Gonna let you in on a little known fact. America’s Debt is not the worse it has ever been. That’s right, as a percentage of GDP, or Gross Domestic Product the debt has actually been decreasing since 1950. What that means is that as a country we owe less money now than we did in 1950. Why won’t they say that on the news? To be honest, it doesn’t make good copy and would make both sides look a little stupid so they won’t go there. They would much rather scare the pants off of you by telling you that Obama is ruining the country or the GOP is trying to kill of Seniors and the Poor. (http://www.gao.gov/special.pubs/longterm/debt/budgetdebt.html) You don’t have to take my word for it. Check the source, check other sources. It’s all there.

Now, the deficit or the amount of difference between what we as a government take in and what we pay out is the problem. This is where “government spending” comes into play. YET!… there is a caveat to this to. Most of the deficit is not spending on entitlement programs. Social Security is a trust fund, for example and what has happened is the government has borrowed money from that fund that it must pay back. That is why entitlements get a bad rap is that this owed money is counted as spending. This source will help show you how it is all broken down. (http://www.gao.gov/special.pubs/longterm/debt/debtbasics.html#difference) When you look at who has what and what the real numbers are you start to see the problem lies in the Congress and not the President. The sad fact is that the Executive Branch does not handle monetary policy, Congress does.

So what is all the bruehaha? For starters the Congress is really just mad at itself. Add to that the ideological divide between the two parties and you got the makings of talk show fare. In order to show you examples of failed monetary spending policies I will list some examples.

1. Forcing the United States Army to buy more that 44 new Abrams battle tanks to keep the factory in Lima, Ohio open. The response from the Army was, “We don’t need the new tanks and it is cheaper that if and when we design a new tank to open back up the factory than to keep it open.

2. Congress forcing the Navy to accept two separate contractors for a second engine for the F-35 JSF plane. This is after the Navy told Congress it doesn’t need the second engine.

3. The entire F-35 Program. This program is to produce a one size fits all fighter that can be modular to fit all the branches of the military. It has suffered numerous cost overruns and set back. What is worse, is the F-22 Raptor that is the full fifth generation air craft would be more than suitable for the Air Force. The cost for developing a smaller aircraft with the same capabilities would be cheaper then spending all that money on the F-35 program what requires all branches to purchase the aircraft. Then there is the whole, one size fits all thing… they tried that… didn’t work. See F-111 program.

Those three are just from the Defense department. We can go back to the Bush administration in which the Crusader program that was almost at completion was cancelled by Rumsfeld and after billions had been spent on development and testing. Same with the Land Warrior Program and the Digital Camo Program. All cost a metric ton of money and all were found to either be cancelled or didn’t work. We are talking billions and billions of dollars. I could go on about the “nation building” spending in Iraq and Afghanistan that has shown not only waste and corruption but also a lack of progress and help and all with no return benefit.

I am not picking on the Defense Department. This is all at the feet of a Congress that complains about spending and then turns around and either forces programs on the military that are unnecessary, according to the military. (You would think they would know.)Or are not asking for accountability and transparency on the money.

All of this on top of waste and fraud found in all layers of the bureaucracy is where the spending is. It isn’t just food stamps, or welfare or disability or Medicare. Granted, there are a lot of reason for people to want to cut these programs from greed to racism and for expansion of these programs ranging from altruism and socialism. The point is that in order for you to be informed about what is really being said, you have to look at the numbers and follow the money.

 

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