By Donella Meadows
–January 19, 1989–
“If you let me write $200 billion a year in hot checks, I’ll give you an illusion of prosperity too,” said Lloyd Bentsen in last fall’s campaign. The question is what the nation will discover, when the illusion has passed and the real economic situation is reckoned. The time for that reckoning seems to be now.
Though George Bush has at his disposal Ronald Reagan’s full team of illusion-makers, he is not the hypnotic master that Reagan is, nor is the nation so willing to be hypnotized. The press, the Congress, the voters, and, it appears, the new President, are beginning to figure up just how much of the prosperity of the past eight years was real (and for whom), what bills are still coming due, and who’s going to pay them.
In separate stories over the past few months unacknowledged pieces of the deficit have been revealed one by one. Nobody, as far as I know, has totalled them all. But it’s clear that the hot checks have amounted to more than $200 billion per year, and they add up to a national debt far higher than the official $2.6 trillion.
The government says, for instance, that the fiscal 1987 deficit was $151 billion. In fact by straight accounting it was $217 billion. The difference was the $66 billion surplus in Social Security tax receipts. Social Security is supposed to be a separate trust fund, not mixed in with the government operating budget. But Lyndon Johnson hit upon the idea of mushing the two accounts together to hide the deficit from the Vietnam War, and Presidents have been using that scam to understate deficits ever since.
Lately Social Security has born a triple burden in illusion-making. Benefits have been cut (though that was not a “cut”, of course; it was a “deferred COLA”). Payroll taxes have increased (all right, all right, it was not a “tax increase”; it was “enhanced government revenue”). The surpluses thus generated appear as assets in the Social Security Trust Fund, meant to sustain you and me in our old age. In fact they have been spent on weapons and debt interest and other items of the government budget. They will have to be paid back by taxpayers someday — or by further Social Security cuts.
That’s only the beginning of the reckoning.
There’s $22 billion in deferred maintenance on national parks and land, according to the President’s Commission on Outdoor Recreation.
There’s somewhere between $100 and $200 billion needed to “clean up” radioactive messes at our nuclear weapons plants. “Cleaning up” does not mean cleaning up, since the materials leaked into soils and waters can never be fully reclaimed (and we wouldn’t know where to put them if they were). “Cleaning up” means immobilizing the radioactive materials as much as possible, so they stay within the hundreds of square miles of national sacrifice area we’ve already created.
The nation owes somewhere between $50 billion and $100 billion (the number keeps changing, always upward) to protect the deposits of citizens who have trusted their savings to 500 insolvent Savings and Loans Banks, one out of every six in the country. Those deposits are backed, unfortunately for the depositors, by the “full faith and credit” of the United States.
So far that full faith and credit has been demonstrated by further borrowing (30-year bond issues, to be paid back through premiums paid by solvent banks), and by tax breaks (“reduced government revenues”) to rich investors willing to buy up the banks at bargain prices.
Another debt not on the books is the $76 billion needed to fulfill the Clean Water Act requirement that the nation’s sewage treatment systems be brought up to minimum secondary standards. Then there is deferred maintenance on highways, airports, and bridges. I’ve never seen an estimate of what that adds up to.
The worst deficits are the most incalculable ones — the erosion of the nation’s resources, natural and human. The groundwaters polluted or overdrawn. The topsoil sent downstream. The acid accumulating in mountain soils and lakes. The air pollution in the lungs of city dwellers. And above all, the children deprived of a decent education.
They say that more kids drop out of the Boston public schools than make it to high school graduation. That a teen-age job program in New York sponsored by four city banks could fill only 100 of 250 guaranteed positions, because not enough applicants, all high-school graduates, could pass an eighth-grade-level math test.
We’ll be paying off that deficit for a long, long time.
It’s no fun at all to come back to reality. It seems as if we’re worse off, though of course we aren’t. We’re better off, because we’re finally telling the truth. If we can sustain the pain without fleeing back into illusion, we’re finally in a position to put our affairs back in order. The leadership for that task now falls on George Bush, who will need both support from us and pressure from us to pull it off. The support might take the form of an adult willingness on the part of all of us to pay our fair share of the inevitable taxes. The pressure should be an insistence that those shares be fair. To take another line from the past campaign, those who got to enjoy the party should be the ones to pay the bills.
Copyright Sustainability Institute 1989