Tom McLaughlin: Dollars, Deficits and Gold
“What can Obama and the Congress do to reduce the deficit?” I asked. Read More...
Dollars, Deficits and Gold
Tue, 11/24/2009 - 2:57pm
Posted by tommclaughlin
“President Obama is in Asia,” I told the class.
“Yes, and he bowed to the Japanese emperor,” said a boy.
“What’s wrong with that?”
“Americans don’t like to see their leader bow to others,” said the boy. “It’s like saying they’re better they we are.”
“He was just being polite,” said a girl. “Nothing wrong with that.”
“Okay,” I said. “Chinese leaders asked how he was going to pay for his health care reform bill, which may cost another trillion dollars. Why would Chinese leaders care about that?”
“Because China lends us money, right?” said another boy.
“Yes. Japan too. Why is that?”
“Because we don’t have enough?”
“That’s right,” I said, pulling down the screen and projecting an image onto it. “This chart goes back to 1980 and it shows how our federal government is paying, or not paying, for what it does.” I explained how we get a deficit when government spends more than it gets in taxes and showed them how the deficit increased during the Reagan and first Bush presidencies and declined during the Clinton years. Then I pointed to the surplus in the late Clinton years and the second Bush’s early years before sliding back into deficit after the September 11th attacks in 2001 and our invasions of Afghanistan and Iraq.
“Notice that during George Bush’s last year the deficit was a record at almost $500 billion?” I said, pointing on the screen. “Now look at President Obama’s first year,” I said. He’s more than tripled the deficit to $2 trillion.”
“Wow,” said three students.
“What can Obama and the Congress do to reduce the deficit?” I asked. “There are at least three ways.”
“Higher taxes,” said a boy.
“Right,” I said. “That’s one way, and Obama is asking Congress to raise taxes, but not nearly enough to reduce the deficit. Why not?
“Because that would make people mad,” said the boy.
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