The National Debt Isn't A Problem

The National Debt Isn't A Problem

People are scared by big numbers. But what do those numbers actually mean?
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Time Magazine recently featured this as its cover.

And it is absolutely, positively, catastrophically, stupid. Here's why.

Two parts of the debt: bonds and interest

Our debt is actually just government bonds that our Treasury issues to people, banks, businesses and other countries etc., and a profit is made off of the bonds because they generate interest. For example, if you were to buy a 1-year bond for $100 with a 5 percent interest rate, you'd get back that 100 dollars, as well as the five dollars generated from interest.

A bond can be issued for as long as 30 years. When the bonds time is up, it has "matured". And until the bond has matured, The United States only has to pay the bond holder the interest, not the actual cost of the bond. And in many cases, a matured bond is just rolled over into the form of another bond.

Here's why this is all good news. Interest rates are near 0 percent right now. So paying for bonds/taking on debt is incredibly cheap, easy and worthwhile right now.

Yes, our debt is a lot of money. But so are our assets.

Of course, you don't want that debt to become unsustainable. Whether it be the interest rate, or the debt itself, those numbers are entirely irrelevant unless you scale it to our ability to pay it off.

For example, many students go into debt by taking out a loan to go to college. And the debt we take on is worth it because the careers that we go into after graduating will make us much wealthier in the future, and our new generated wealth then goes back into paying back our loans.

It's the same way with our government. Except it's a little better. People have to pay back their debts. Governments don't. This is because governments aren't people and they won't die in 80 years. So they can have debt for as long as they want, they just have to make sure that the value of their assets is greater than the value of their debt.

When the government issues a bond and uses that bond money to build a bridge, the government not only has more debt, but it also has more bridges. And those bridges generate a return on investment, and sometimes that return on investment exceeds the amount borrowed.

So in a weak economy, governments borrowing money to spend on a project with a much higher return on investment, is actually a very good thing to do, because the value of assets that the government acquires would be much greater than the value of our debt.

If the government finds things to invest in that'll have a higher return rate than a bond's interest rates, it should continue to issue bonds and run deficits rather than taxing people to fund those projects directly. This is a strategy we should be using right now, considering that interest rates are at historic lows, and there are several projects to invest in with return rates of well over 8 percent.

And when the economy grows as a result and has fewer things to invest in, they can take advantage of the broadened tax base, and run surpluses. But this should only be done in a healthy, recovered economy.

As long as the government keeps the value of its assets greater than the value of its debt, then the government will remain solvent and will continue to function. So not only is the national debt not a problem, but it's actually something that we need right now.

Cover Image Credit: Time Magazine

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​An Open Letter To The People Who Don’t Tip Their Servers

This one's for you.
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Dear Person Who Has No Idea How Much The 0 In The “Tip:" Line Matters,

I want to by asking you a simple question: Why?

Is it because you can't afford it? Is it because you are blind to the fact that the tip you leave is how the waiter/waitress serving you is making their living? Is it because you're just lazy and you “don't feel like it"?

Is it because you think that, while taking care of not only your table but at least three to five others, they took too long bringing you that side of ranch dressing? Or is it just because you're unaware that as a server these people make $2.85 an hour plus TIPS?

The average waiter/waitress is only supposed to be paid $2.13 an hour plus tips according to the U.S. Department of Labor.

That then leaves the waiter/waitress with a paycheck with the numbers **$0.00** and the words “Not a real paycheck." stamped on it. Therefore these men and women completely rely on the tips they make during the week to pay their bills.

So, with that being said, I have a few words for those of you who are ignorant enough to leave without leaving a few dollars in the “tip:" line.

Imagine if you go to work, the night starts off slow, then almost like a bomb went off the entire workplace is chaotic and you can't seem to find a minute to stop and breathe, let alone think about what to do next.

Imagine that you are helping a total of six different groups of people at one time, with each group containing two to 10 people.

Imagine that you are working your ass off to make sure that these customers have the best experience possible. Then you cash them out, you hand them a pen and a receipt, say “Thank you so much! It was a pleasure serving you, have a great day!"

Imagine you walk away to attempt to start one of the 17 other things you need to complete, watch as the group you just thanked leaves, and maybe even wave goodbye.

Imagine you are cleaning up the mess that they have so kindly left behind, you look down at the receipt and realize there's a sad face on the tip line of a $24.83 bill.

Imagine how devastated you feel knowing that you helped these people as much as you could just to have them throw water on the fire you need to complete the night.

Now, realize that whenever you decide not to tip your waitress, this is nine out of 10 times what they go through. I cannot stress enough how important it is for people to realize that this is someone's profession — whether they are a college student, a single mother working their second job of the day, a new dad who needs to pay off the loan he needed to take out to get a safer car for his child, your friend, your mom, your dad, your sister, your brother, you.

If you cannot afford to tip, do not come out to eat. If you cannot afford the three alcoholic drinks you gulped down, plus your food and a tip do not come out to eat.

If you cannot afford the $10 wings that become half-off on Tuesdays plus that water you asked for, do not come out to eat.

If you cannot see that the person in front of you is working their best to accommodate you, while trying to do the same for the other five tables around you, do not come out to eat. If you cannot realize that the man or woman in front of you is a real person, with their own personal lives and problems and that maybe these problems have led them to be the reason they are standing in front of you, then do not come out to eat.

As a server myself, it kills me to see the people around me being deprived of the money that they were supposed to earn. It kills me to see the three dollars you left on a $40 bill. It kills me that you cannot stand to put yourself in our shoes — as if you're better than us. I wonder if you realize that you single-handedly ruined part of our nights.

I wonder if maybe one day you will be in our shoes, and I hope to God no one treats you how you have treated us. But if they do, then maybe you'll realize how we felt when you left no tip after we gave you our time.

Cover Image Credit: Hailea Shallock

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Sociolinguistics Series: Part 50

Language is a powerful tool.

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It's part 50--halfway to 100! I'm so glad to still be here writing! In this section, we will talk about Dr. Shikaki's findings on how Palestinians view the state of Israel.

25 years ago, 85% of Palestinians supported a two-state solution. 10 years ago, this number decreased to 70%. Dr. Shikaki believes this was due to an increase in the prominence of Islamism in Palestinian society during the second intifada; Islamists were opposed to the two-state solution. In the most recent survey, the December 2018 one, only 43% of Palestinians supported the two state solution.

In 2000, American President Bill Clinton met with Israeli Prime Minister Ehud Barak and PA Chairman Yasser Arafat at the Camp David Summit to come up with a solution to the conflict. It ended without an agreement, but in December of 2000, Clinton once again proposed a resolution: the Clinton Parameters.

The content of the Parameters basically allowed Israel to annex settlements while Palestine to take 94-96% of the West Bank, as well as Arab neighborhoods in East Jerusalem. There were other guidelines regarding territory, refugees, security, and the end of the conflict. Essentially, the West Bank would have been split up by Israeli roads and settlements--which is kind of the reality today.

Both the Israeli government and Arafat accepted the terms with reservations, and Arafat wrote to Clinton a letter asking for clarifications on the terms. Clinton and Dennis Ross, an envoy of the Parameters, publicized that Arafat had refused to accept the terms; they painted Palestinians in a negative light, saying that Israel wanted to accept the peace negotiations but Palestine did not.

American Lawyer Robert Malley was at the Camp David Summit and oversaw parts of the Clinton Parameters. In 2001, he said that three myths had come out of the failure of both negotiations, and that these three myths were dangerous to any future peace processes if people kept believing in them.

These myths are as follows: "Camp David was an ideal test of Mr. Arafat's intentions," "Israel's offer met most if not all of the Palestinians' legitimate aspirations," and "The Palestinians made no concession of their own."

He said that these three statements were not true but very heavily publicized by America and Israel after the negotiations failed; rather, there is more nuance to each of these issues, and America and Israel have just as much responsibility in the failure of the Summit and Parameters as Palestine did. Malley wrote, "If peace is to be achieved, the parties cannot afford to tolerate the growing acceptance of these myths as reality."

Anyway, what does this have to do with Dr. Shikaki? He polled Palestinians not only on the their attitudes to the two-state solution, but the Clinton Parameters as well. 25 years ago, there was 60% support for the Clinton Parameters by Palestinians, but the June 2018 poll showed that the number had gone down to 37%.

The last ten years shows a significant decrease in public support for both the two-state solution and the Clinton Parameters, and it could be a result of disagreeing with specific parts of the proposals (such as how the Temple Mount/Dome of the Rock or Jerusalem is delegated).

I did some further digging when I got home, and I found this data from the UN Division for Palestinian Rights website:

"A 25 December [2000] published poll found that 48% of the 501 Israelis questioned were opposed to the proposals; 57% would object to Palestinian control of the Al-Aqsa Mosque compound; 72% were against even a limited return of Palestinian refugees to Israel. A 29 December published poll found that 56% of the Israelis would oppose a peace agreement reached on the basis of the Parameters."

This shows that though public media--especially Western media--may have painted the Palestinian government as the villain (and Israel and America as the "victims"), the proposals accepted by either government had varied support among its people.

The Israeli civilian population did not want to accept the Clinton Parameters because of the way certain things would be resolved; their reservations lie with the Temple Mount/Al-Aqsa Mosque because the Temple Mount, which is the holiest site in the world for Jews, would have been given to Palestine, while Jews would have control of the Western Wall of the Temple Mount (which is the status quo).

In addition, there was a section in the Clinton Parameters that dealt with the right of return for Palestinians, where there would be a certain number of Palestinian refugees who settled in the West Bank and Gaza Strip, while other Palestinians either would become citizens of their host countries, move to a third-party country, or settle back into the land that is Israel Proper (with permission from the Israeli government, of course); many Israelis did not support this.

That was the public opinion years ago. Today, there is even less support for these proposals. Dr. Shikaki outlined three issues as reasons for a decrease in support of compromise, which we will cover in the next section. Stay tuned!

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