The Furure Part 5

I've been talking about the national debt and what we can do to manage it, which means try to reduce it,keep it where it is or let it grow at a controlled pace.

There is an argument that some of the debt is needed.  If I want to build a new road or bridge that is expected t last 50 years, why not issue bonds payable over the useful life of the item?  In fact much of the New York bridges and tunnels were built that way and tolls were used to pay back the debt.  The tolls turned into a money maker, but that a whole story related to New York - New Jersey politics that is not something for here.

The real danger concerning debt is not being able to pay it and therefore defaulting.  This is actually something that has happened to many countries over the years but when medieval France defaulted, it was a matter for the court and the bankers with little impact on the French people, who had very little stake it any of it.  In today's society it would mean not meeting our obligations to our social security recipients as well as our creditors and the political consequences would be devastating.

Default is very unlikely so we are back to managing it.  Clearly the best option is to control it withing limits that keep it manageable while not destroying the economy for everybody.

While increased taxes are politically difficult, it might make sense to continue to increase user fees to make users of the assets pay for them.  Of course reducing Government spending can help but there really isn't much discretionary spending (proportionately) in the Government to cut.  Of course keeping interest rates low while having some inflation also helps manage the debt since it makes the principle a bit cheaper each year while reducing the annual charge for the money.

Perhaps the bet way to address the debt is also a way to help the environment.  Impose a usage fee for pollution.  Now this has been very controversial and has issues but if, similar to tolls on roads and bridges we charged people who pollute the air and water the cost of cleaning it up, it would be inherently fair.  Of course it we only charge American companies it would make them less competitive, so maybe the charge has to be on end products based on standards related to the originator's pollution index.

It would be fairly easy, to do this as a reward incentive.  Products that don't show how they are non-polluting get the full charge.  This charge is reduced based on certified proof of environmental compliance.

This is of course a new tax and therefore will be opposed.  I'll discuss this more as we move into the environment.

(to be continued)