What is National Debt? According to Websters Dictionary the National Debt consists of the debt owed by a state or country. This debt includes government bonds like treasury bonds, savings bonds that anyone can buy at the bank. Also included are loans taken out by the government, businesses, and by individuals. (national debt is here defined as the sum of all recognized debt of federal, state & local governments, international, private households, business and domestic financial sectors, including federal debt to trust funds – but excludes the huge un-funded contingent liabilities of social security, government pensions and medicare). The National Debt Total is now over $28 Trillion, or $103,000 per man, woman and child according to the Grandfather National Debt Report Dec 2000 by Michael Hodges – – http://mwhodges.home.att.net/nat-debt/debt-nat.htm.) So, when an individual buys a home or a car or a business builds a new building on credit, it too, by this definition, is included in the debt. Therefore, the United States of America is by definition a debtor country. Most of what is purchased by our citizens and businesses in this country is purchased on time. We buy our automobiles, our homes, much of our furnishings, major appliances, and our clothing on credit cards, or on installments. So when the media speaks of the debt, whose debt are they talking about? As far as my debt goes, I plan to pay all of it. I have a source of income and I try to act responsibly by not acquiring more debt than I can pay.How often does an individual purchase a large item when their economic future is in question? If they are a responsible individual, they dont. If you are unsure of your future employment you usually do not go out and buy a new home or a new vehicle. By this definition, one reason our National Debt goes up is because of these types of purchases. Anyone can access historical data on the Gross National Product (GNP) or the National Debt amount through the local library or through an Internet connection. If we look at the relationship between them you will notice that in times of business growth and success, the GNP increases. (The GNP is the combination of products and services produced in our country for sale or export.) The debt in this country also increases because people by more government bonds, businesses grow and take loans to expand their production, this causes new jobs which increases the workforce who with new jobs buy more products, new homes or automobiles (mostly on installments), which create more demand… — the cycle feeds upon itself. There are as many theories of why this works as there are individuals that study the economic cycle. But, as long as businesses are healthy, there are jobs, as long as there are jobs there is money to be spent, as long as there is money there will be demand for product, as long as there is product there will be job opportunity for businesses to grow and expand. Having been raised in a family business, I have been exposed to both good times and bad. I have observed over my adult years that most of the controversy comes between those who are in business and those in the theory business. The best example I can think of was a prominent defeated political nominee, who after being forced to get a job in the private sector and having failed there a few times before succeeding, stated that he wished he had experienced this real world business venture earlier in his political career because he now knew what it was all about. I take this to mean that unless a politician has experienced the real working world prior to a political venture, he cannot know how best to represent the working base of this country. For without the working base of this country, both large and small businesses, this country would not have a healthy Gross National Product, nor would it be able to provide the vast services that it does provide to the people of this great nation or the world beyond, nor allow the individual or businesses the opportunity to buy anything whether in a lump sum or on installment. Now that I have my own business, I know from experience that when theory is applied in the real world it rarely goes as planned. Contingency plans must be maintained because the real world does not function like the theorist would like. Having a business degree and having had to apply what I was taught in the real world was an education in it self. Most of it did not work smoothly. Theory is a nice place to start, but until you have to live it, and make a living at it, one does not appreciate the terms taking the bull by the horns or flying by the seat of your pants. I take what I hear and read from teachers and scholars with a pound of salt, because often educators teach only from theory and not from experience. It is not that what they teach has no value, but it is not set in concrete, it is only a beginning point. The firm foundation comes from hard work, putting in the time and sweat and learning first hand how to turn obstacles into opportunities. Robin Berry, Huntsville TX (POB 1933, Huntsville, TX 77342, 936-291-3331 for verification)
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