Been thinking about....benefits

Every time a government decides to participate in providing some kind of "Monetary Benefit" a redistribution of wealth is embedded. It doesn’t matter if the government is a king, a congress, a prince or a General Assembly….money is taken from some and distributed to others. However, there is a distinction between benefits. In the United States, some, such as Social Security, are contributory which means that the recipient has paid into the benefit. Others, such as child care, are benefits for which the recipient has made no contribution.

Any government can provide both monetary contributory benefits and monetary non-contributory benefits, as a way to redistribute wealth, so long as there is money for redistribution. The slippery slope is when a government chooses to borrow today to redistribute Assumed Future Revenue(AFR).

In my opinion, AFR is the same as debt. There is an expectation that sometime in the future the government will collect enough surplus revenue to retire (pay off) the debt. Often this situation is termed “Unfunded Accrued Liability (UAL).” Both our North Carolina retirement system, and our North Carolina health system, have debt that we expect to address sometime in the future with revenue we expect to collect. The mistake in this is that UAL is NOT considered in North Carolina’s constitutional mandate to have a balanced budget so it isn’t addressed in our two year budget debate.

One problem with the notion of UAL in a democracy is political accountability. Most long term debt at the national, or state, level is created by short term elected officials who will not be held accountable for their long term actions. The trillion dollar debt created in response to the Covid epidemic is a perfect example. If our national debt is retired in the order of its creation, not a single U.S. senator or congressman will be alive, much less in political office, when that debt could be retired.

The national debt hustle is one of America’s great political “Stings"(cons). Here’s how it works: The government does something foolish for which it has no revenue, so a Congress borrows by adding to the “National Debt.” In America, most of the national debt is owed by each and every citizen….so the government is simply adding to your individual debt. In 1943, my national debt share was a little over $325 and a child born today has a national debt share of about $118,000. Think about this like credit card debt. A kid born today pays annual interest of about $3,100 and that amount is rising each year. In effect, short-term politicians have spent your children’s money and expect you to return them to office to do more of the same. This is a Democratic and Republican budgetary hustle that has become a national farce. Every two years our Congress has a public tug-of-war over benefits that always results in a deficit budget that is approved by the President. The last time America had a balanced budget was 2001 and the U.S. has had a balanced budget only twice in the last fifty years. The irony is that a half dozen Senators, working together, could force a Congress to take action on the debt.

History is supposed to be a teacher and national debt has been the fall of nations for centuries. There is substance to the cliché, "Great nations do not die in battle, they die by suicide." Every Congress has an opportunity to reduce or increase our national debt yet that issue is rarely mentioned in political campaign advertising. Candidates for the U.S. House and Senate are seldom asked if they intend to try to reduce the national debt or if they will vote against increasing it. I have yet to see a television commercial that mentions national debt. We are choosing politicians who snicker at Esse Quam Videri. I suspect we will continue to elect hustlers and annually add another trillion or so to the debt until the bill comes due for a future generation….and it will.

Joe Mavretic is a former Marine fighter pilot, legislator and former Speaker of the NC House.