We Must Balance Our National Budget – A Return to Fiscal and Monetary Soundness – America’s Biggest Threat

By MG Paul E Vallely, US Army (Ret) 

Since graduating from West Point and several other military schools, including the Army War College, national security has been my focus. I have been an active investor in the stock market, so I understand budgets and why a balanced budget is as essential to the country as our household.

The Growing National Debt 

The U.S. has carried debt since its inception. Debts incurred during the American Revolutionary War amounted to over $75 million by January 1, 1791. Over the next 45 years, the debt grew until 1835, when it notably shrank due to the sale of federally-owned lands and cuts to the federal budget. Shortly after that, an economic depression caused the debt to grow again into the millions. The debt grew over 4,000% during the American Civil War, from $65 million in 1860 to $1 billion in 1863 and almost $3 billion shortly after the war’s conclusion in 1865. The debt grew steadily into the 20th century and was roughly $22 billion after the country financed its involvement in World War I.

Notable recent events triggering large spikes in debt include the Afghanistan and Iraq Wars, the 2008 Great Recession, and the COVID-19 pandemic. From FY 2019 to FY 2021, spending increased by about 50%, mainly due to the COVID-19 pandemic. Tax cuts, stimulus programs, increased government spending, and decreased tax revenue caused by widespread unemployment generally account for sharp rises in the national debt.[1]

The National Debt Explained 

The national debt is the amount of money the federal government borrowed to cover the outstanding expenses incurred over time in a given fiscal year (FY) when spending (ex., money for roadways) exceeds revenue (ex., money from federal income tax), a budget deficit results. The federal government borrows money to pay for this deficit by selling marketable securities such as Treasury Bonds bills, floating rate notes, and Treasury inflation-protected securities ((TIPS). The national debt is the accumulation of this borrowing and associated interest owed to the investors who purchased these securities. The national debt grows as the federal government experiences reoccurring deficits, which is expected.

The national debt is like using a credit card for purchases rather than paying off the total monthly balance. The cost of purchases exceeding the amount paid off represents a deficit, while accumulated deficits over time represent a person’s overall debt.

Funding Programs & Services 

The federal government needs to borrow money to pay its bills when its ongoing spending activities and investments cannot be funded by federal revenues alone. Decreased federal revenue is primarily due to reduced tax rates or individuals or corporations making less money. The national debt enables the federal government to pay for essential programs and services even if it does not have funds immediately available, often due to decreased revenue. Decreases in federal revenue coupled with increased government spending further increase the deficit.

Consistent with the purpose of the federal government established by the U.S. Constitution, money is spent on programs and services to ensure the well-being of U.S. residents. The Constitution’s preamble states that the federal government’s purpose is “…to establish Justice, ensure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity.” Uninterrupted funding of programs and services is critical to residents’ health, welfare, and security.

Our debt is rolling along at about $35B. The new global monetary organization is BRICS. It comprises  Brazil, Russia, India, China, South Africa, Iran, Egypt, Ethiopia, and the United Arab Emirates. Initially identified to highlight investment opportunities,^[1] the grouping evolved into an actual geopolitical bloc, with their governments meeting annually at formal summits and coordinating multilateral policies since 2009. Bilateral relations among BRICS countries are conducted mainly based on non-interference, equality, and mutual benefit.

The founding countries of Brazil, Russia, India, and China held the first summit in Yekaterinburg in 2009, with South Africa joining the bloc a year later. Iran, Egypt, Ethiopia, and the United Arab Emirates joined the organization on 1 January 2024. Saudi Arabia has officially joined, and according to monetary experts, BRICS will control 2/3 of the global GNP. They are out to diminish and kill the dollar. We, the West, seem to have no counter to the BRICS initiatives.

America, we must get serious about balancing our budget to reduce inflation and reverse the continued weakening of the dollar. It is time to return to the gold standard, as BRICS nations, especially Russia and China, have done.

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Source: https://standupamericaus.org/we-must-balance-our-national-budget-a-return-to-fiscal-and-monetary-soundness-americas-biggest-threat/