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105 Business & Investing > Economics  
Taking A Stand On Our National Debt

The author has chosen to use a question-answer format in order to make the often complex subject matter, easier and more enjoyable to read. Q and A is not a dialogue bewteen real people -- the author has provided the dialogue for both Q, standing for Quaero, which is Latin means "I search for" and A, Auctor, which in Latin means "person responsible."

Q- I understand you have been following the federal budget process closely for the past ten years. How did you get interested in a subject which most people find extremely boring as well as complicated?

A- My interest can be traced to 1982 and the formation of the Grace Commission.

Q- What is the Grace Commission?

A- The Grace Commission, originally known as the President's Private Sector Survey on Cost Control was established in February 1982 when President Reagan asked prominent businessman, J. Peter Grace to head a commission for the purpose of conducting a comprehensive study of government spending. The Commission was privately funded and consisted of 161 high-level private business executives familiar with cost control and efficiency.

When the Commission began its work I eagerly anticipated the results, naively thinking they would come up with a relatively quick and easy way out of our national debt problems.

Q- It sure looks like they didn't do their job.

A- Oh but they did. The Commission originally came up with 2,478 recommendations, which if implemented, would have saved $424.2 billion over three years.

Q- Then they didn't follow through?

A- More than half (1,426 proposals) had been implemented by the end of fiscal year 1987.

Q- Then why does our debt keep growing?

A- Eliminating waste is only one part of the problem. Our elected officials have continued on an unprecedented spending spree. You've no doubt heard that it took 204 years to accumulate the nation's first one trillion of debt but only 4 years to accumulate the second trillion.

Q- Which four years?

A- 1981 -1985. The debt ceiling was raised in 1985 to 1.823 trillion and then again in 1986 to 2.3 trillion. But, as was so often said during the eighties, "You, ain't seen nothing yet! " With nobody seeming to care, our elected officials kept spending. In 1990 the ceiling had to be raised to $3.5 trillion but the spending continued so that in 1991 the debt ceiling quietly passed the $4 trillion mark.

Q- You're right. I didn't hear anything about it, and if I had I wouldn't know what to make of it. This may sound stupid, but I doubt that I'm the only one confused about how the deficit is measured. It seems there are a lot of very different numbers out there all claiming to be the deficit.

A-You're absolutely right to be confused and your confusion is the result of intentional obfuscation.

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 Additional Info
 No. 119
 Posted on 7 June, 2006
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