A Nation in the Red: The Government Debt Crisis and What We Can Do About It

CHAPTER 1

A NATION IN THE RED

To contract new debts is not the way to pay old ones.

—George Washington

The United States through reckless management and spending by Congress has become A Nation in the Red, joining a large group of countries suffering through depressions caused by irresponsible governments. The use of debt by governments is a politically easy way out of increasing taxes that people do not want to pay. It is also a good mechanism to make the economy appear as though it is growing fast when, in fact, it is not. When government borrowing is accompanied by borrowing by the private sector, a robust economy can develop that includes housing and stock market price increases, income increases, tax receipt increases, and so on. This phenomenon ...