Spending imaginary dollars

Among the decisions the next president will make that will carry a lasting effect on U.S. social and economic life is how to spend an estimated $1.7 trillion budget surplus. Unfortunately for voters, it is probably the most complex issue as well, as it concerns both real and imaginary numbers. Even economists sometimes get confused when explaining the Congressional Budget Office’s projection and its intricacies.
Spread out over 10 years, the unprecedented surplus forecast remains tentative, and might whither if federal spending changes even slightly. Both the surplus’ complexity and its uncertainty has forced the presidential candidates to offer extensive detail with their spending and tax cut proposals, leading to Vice President Al Gore’s 197-page Economic Blueprint, which explains in tedious detail his “modest” tax cuts and new program plans.
Despite these complications, only two questions need to be answered concerning surplus spending: What are you doing with the portion that belongs to the social security trust fund? And, what are you going to do about the national debt?
The federal government estimates that the total surplus — at current rates of spending — will be nearly $3 trillion, of which $1.3 trillion comes from the social security trust fund. The Social Security trust creates a surplus because more money is currently being collected than spent by the program. Eventually, though, the government will begin paying out more than is flowing in to the trust (sometime after 2019), leading to the program’s bankruptcy.
As many Americans approaching retirement vote, Social Security’s solvency has received much attention from the media and the primary candidates. Fearing negative reaction from this demographics, both Gore and Texas Governor George W. Bush have declared the Social Security surplus sacred. Although they have vowed to preserve the trust, both candidates have said they will use the $1.3 trillion to eliminate some of the national debt, which when last checked was $5.6 trillion.
Rightfully considered a high priority by nearly every candidate, the U.S. debt wastes around $224 billion every year in interest payments, one-ninth of the federal spending in 1999. (Interest payment savings during the next 15 years would be used to replenish social security.) Gore says he would pay off the debt by 2012. Bush’s promised across-the-board tax cut of $1.3 trillion spread out over 10 years would seriously limit the government’s debt reduction efforts.
Few third-party candidates have offered any similar detail about their plans for a surplus, if they even think we have one. Green Party nominee Ralph Nader only offers more spending plans. He proposes no tax cuts and has said little or nothing about debt reduction. Libertarian Harry Browne’s surplus thoughts are on the opposite side of the political spectrum. He considers the surplus excess taxation, which should be promptly returned to the American people.
As the United States teeters temporarily on a trillion dollar surplus, it seems only natural that the candidates for the upcoming presidential election would begin making out their White House wish lists. To think, only yesterday — or 10 years ago — our government was mired precariously in debts and deficits. Now, we are on the veranda of a fluctuating surplus that might allow unprecedented spending or mega-tax cuts. Although there might be room for a little of both, eliminating the national debt should come first.