Eliminate the national debt using the projected federal budget surplus

By David R. Shock

The anticipated proceeds from the anticipated federal budget surplus should be applied towards eliminating the national debt. I oppose efforts by Republicans and Democrats to spend the surplus to "save" Social Security or to cut taxes until the federal debt is paid off.

During the early 1980s, President Reagan and the Republicans made huge tax cuts based on the theory of supply-side economics. The theory of supply-side economics held that if huge tax and spending cuts were made, the benefits accruing from these actions would "trickle down" to those in need. While Reagan and the Republicans cut taxes, they never followed through on cutting spending. As a result, the national debt ballooned to levels never before witnessed. The size of government actually grew during Reagan's administration (based on total federal expenditures), while revenues dropped. The $1 trillion dollar national debt in 1980 was more than $3 trillion by the time Reagan left office in January 1989. Today, the national debt is quickly approaching $6 trillion, even when we are supposed to have surpluses. [see http://www.federalbudget.com/]

In the current era of low unemployment and overall prosperity, we lose sight of the national debt. The national debt is a monster that will stalk future generations, especially members of so-called "Generation X." The economy moves in cycles and the current prosperity today could easily give way to recession in several years. It is therefore imperative that the federal budget surplus be used in fiscally responsible ways to reduce future taxes and to reduce the future debt load on upcoming generations of young Americans.

Current proposals by presidential candidates of the Democratic and Republican parties include such things "saving Social Security," "cutting taxes," and "reducing the national debt." Only one of these options reduces the national debt. We need to spend all of the projected budget surplus on reducing the national debt. The surplus may be a temporary phenomenon. It is difficult to project into the future with any certainty. Now is the time to use the surplus to free future generations from trillions of dollars of debt accumulated during the 1980s and 1990s.

Social Security and the National Debt

I strongly oppose spending the surplus on Social Security. Current proposals for "saving Social Security" focus on transferring surplus funds from the general fund of the U.S. government to the Social Security fund. The general fund and Social Security are two separate funds receiving revenues from different sources. General fund revenues come overwhelmingly from federal income and corporate taxes. Social Security revenues come from the FICA payroll tax. The Social Security Act of 1935 states that revenues for the Social Security program are to come from the FICA payroll tax. If additional revenues are needed for Social Security, the FICA tax will need to be increased. I oppose any attempts to raid the general fund to pay for Social Security. The surplus must be used to pay down the national debt and not be used for Social Security.

Cutting Taxes

As a Libertarian, I believe in low taxes. I also believe in fiscal responsibility. Cutting taxes reduces our ability to eliminate the national debt. The national debt and the costs associated with debt maintenance will be paid by a generation in the future that enjoyed none of the spending and tax cuts of the 1980s, which caused the debt to balloon. Taxes can and must be cut once the national debt is brought under control. To cut taxes just for the sake of cutting taxes is fiscally irresponsible. We must not pass up the opportunity that we currently have to significantly reduce the national debt. More than 15 percent of the federal budget goes to debt service. If the debt were to be eliminated, this 15 percent could immediately be used for tax relief without cutting any spending. This is a long-term project that I am committed in pursuing.