An acquaintance of mine once asked me to try and provide debt counseling to his daughter and son in law. They were mired in bills, far greater than they could service on their available income. That is not uncommon in America today.

Little wonder then that our Nation’s debt load is becoming so oppressive that it risks harming the future growth and well being of the country. By the end of 2016 our Federal debt outstanding is expected to be at 105.3% of the Nation’s GDP. Under President Clinton, with a strong economy backing him, the ratio fell to below 60%. Under President Bush it rose into the mid 60% range but under President Obama and an anemic economy we have soared like the long arm of a hockey stick!

The couple I attempted to counsel behaved as if everything was just fine. They continued to go out to dinner and saw no reason to cut back on discretionary spending. In short, they saw life as they wanted it to be rather than how it really was. After all they could always declare bankruptcy.

President Obama in his 2010 State of the Union speech observed, “We … still face the massive deficit we had when I took office….Medicare, Medicaid and Social Security will continue to skyrocket….Let’s invest in our people without leaving them a mountain of debt.” I feel like saying, hello, is anybody home? Because, it has only gotten worse!

Now if the couple I tried to help had received a windfall of income what would you have recommended that they do with the money? Personally, I’d have made as strong a case as possible for them to pay down as much of their debt as possible. In fact, I would bet that all of the aforementioned Presidents would tell their kids that as well. For all his personal foibles, President Clinton at the 2012 Democratic Convention said, “We’ve got to deal with this big long term debt problem or it will deal with us.”

In March of this year the Wall Street Journal reported that the Government had taken in $110 billion in fines from the big banks as a result of the mortgage fiasco of 2008. Keeping it simple about half of that money went to help citizens in trouble via an approved list of organizations. About 50 billion went to the U.S. Treasury and they refused to tell the Journal how the money was to be used. I guess they weren’t sure how much the Domino’s bill was going to be.

More recently the press reported a proposed settlement with Deutsche Bank of $14 billion and of course, let’s not forget the gigantic settlement with Wells Fargo at $185 million for out and out fraud. I guess if you’re the hometown bank it’s easier to get off cheap.

The fact of the matter is that ‘we’ got a windfall of money but because our elected officials do not have the will to deal with our debt problem we are just going to spend the money. Even worse we are not going to tell our citizenry how it will be spent. That’s just plain wrong.

Solving the debt problem is going to be painful. Of that there is no question. But, to solve it we have to accept that we have a problem. The headline on page one of today’s Wall Street Journal reads, “Missing from 2016 race: Budget Deficit Hawks. In point of fact they both want to incur tens of billions of dollars of more debt. Why? It’s easier to get elected when you tell your friends and neighbors you are going to help them!

In the 2015 Federal budget Medicare, Medicaid and Social Security represent $2.33 trillion of spending with military spending the next largest chunk at $609 billion. That’s today. But, two others issues are likely to exacerbate our problems going forward. The first is demographics. Presently there are 4 workers for every retiree. By 2046, that is expected to fall to 2.6 to 1. That means either enormous increases in taxes or even more deficit spending. Second, keep in mind that interest rates are unrealistically low at present. When they rise, debt servicing costs will rise materially, further exacerbating our problems.

I don’t want to kid you, there is no easy fix. No one is going to cut Social Security or Medicare. Seniors vote. Nor are we going to cut the military much if at all. The world is a dangerous place. While we probably do need to raise taxes some on the rich the fact is that there are not enough of them. Even if we taxed them at 100% it would not solve our problem.

We do need to make tax inversions illegal. That’s where big U.S. based corporations take advantage of all that America does offer but move their headquarters for tax purposes to a foreign country depriving our Nation of material amounts of income. To be honest, those kinds of moves are bull from the standpoint of taking care of America. It is unacceptable corporate behavior. Just because it is legal doesn’t make it right. But it won’t solve the problem either.

The real solution lies elsewhere. Simply put there are two levers, income and expense. Grow the country’s production (GDP) faster than expenses and the ratio falls. Indeed according to that is exactly what happened during the Clinton Administration.

“The Clinton years showed the effects of a large tax increase that Clinton pushed through in his first year…..It fell almost exclusively on upper-income taxpayers. Clinton’s fiscal 1994 budget also contained some spending restraints. An equally if not more powerful influence was the booming economy and huge gains in the stock markets, the so-called dot-com bubble, which brought in hundreds of millions in unanticipated tax revenue from taxes on capital gains and rising salaries.” (underlining is mine) The result was that the deficit ratio fell.

So, the long and the short of it is that we must get our growth engine going again and we can’t just be a service economy. We are massive creators of technology but production goes offshore. U.S. based manufacturers still can’t build a car as well as the Japanese and they build them in America!

We must change the national debate from Trumpian immigration control and walls or Mrs. Clinton’s desire for $20 billion for expanding school choice or $2.5 billion for guaranteed paid maternity leave to what really matters which is figuring out how to once again be both an innovation engine and a manufacturing center. That is the only way we have a chance of really changing our Nation’s debt situation. It would be really hard to accomplish that which is why our candidates avoid the subject like the plague.

As an electorate we have the opportunity to demand such a conversation if we take that responsibility on. But, let’s start small and get our feet wet. Mr. or Ms. President; when we get windfall income like the bank fines (a) make sure the penalty is meaningful because it is not in the Wells Fargo case and (b) just like you would counsel your kids, use that money as a matter of discipline to pay down the debt.

Sometimes it is the principle of things that counts.

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