Late in the evening of Wednesday, Oct. 16, President Barack Obama signed legislation to re-open the federal government, which had been partially shut for 16 days. The political drama captured the attention of the media, which was consumed by the tactical struggle and the question of who won and who lost.

The real story occurred on Friday, Oct. 18, at 3 p.m. when the Treasury announced that the federal debt exceeded $17 trillion. Every U.S. citizen now has a debt obligation approaching $54,000 as the federal government continues unabatedly to borrow $200 million an hour.

Surpassing the $17 trillion debt mark was just the introduction to the story that should have dominated the media. The history of how we got here would then follow. It took the U.S. government 193 years to rack up the first trillion dollars; eight years later, in 1990, the number jumped to $3 trillion. When George W. Bush took office in 2001, the debt was $5.7 trillion. President Bush only needed two terms in office to balloon the debt to $10 trillion. Not to be outdone, President Obama has increased the debt 70 percent in less than six years and is on target to reach the 100 percent mark ($20 trillion) when he leaves office.

The real story would end by addressing what drives spending and the resulting deficits and debt — “entitlements.”

Robert J. Samuelson, in an Oct. 20 op-ed piece in The Washington Post, suggests we banish the term entitlements and identify specific programs in order to evaluate them. Here is the Top 10 list, brought to you by the Office of Management and Budget, and ranked by the millions of recipients in the program: Medicaid – 63.2, Social Security – 55.8, Medicare – 49.9, Food stamps – 46.6, Child nutrition – 35, College loans – 11.3, Unemployment insurance – 8.9, Supplemental Security Income – 7.9, Veterans compensation – 3.8, Civil-service retirement – 2.5.

If we eliminate the overlap in some of the programs where recipients receive multiple benefits, that still leaves about half of all U.S. households receiving a federal benefit. That’s a huge constituency. In 2012, all of the entitlement programs accounted for 63 percent of total federal expenditures.

Samuelson also suggests that we get rid of the word entitlement because it deludes the public into thinking the programs are untouchable. If truth be told, these programs have no legal standing. The U.S. Supreme Court dealt with this issue as early as 1937 (Helvering v. Davis) when the court ruled that Social Security was not a contributory insurance program but a payroll tax for a welfare system. Our 535 elected politicians in Congress can alter the terms of Social Security or any other federal program on a whim. In 1960, the Supreme Court confirmed the status of Social Security, and thus all other federal programs, in Fleming v. Nestor, when the court proclaimed that Social Security benefits were not “accrued property rights.”

The polls keep telling us that the public has a limited willingness to be taxed and instinctively understands that we can’t keep spending and borrowing at the current rate. At some point, interest rates will rise and the $223 billion in interest we currently spend annually to sustain our borrowing addiction will rise and squeeze out other spending options and reduce investment available to private capital markets. At some point, our creditors will become disenchanted, since their “investments” are being repaid in depreciated dollars that the feds print ‘round the clock. Worst-case scenario, our monetary system collapses.

But the same polls tell us that 90 percent of our fellow citizens don’t want Uncle Sam to mess with “their benefits.”

America, you can’t have it both ways. In the 1970s, the U.S. was the world’s biggest creditor. Today, we’re the biggest debtor on the globe. The answer is to modify benefits and eligibility levels over time so as not to distort the economy and also to make the changes politically acceptable. Blaming the Beltway for gridlock is an easy distraction from the real problem.

The story will end well when Americans finally look in the mirror to identify the real problem and admit that all they are doing is passing a heavy financial burden on to our children and grandchildren so that we can continue our current bi-polar lifestyle. Washington will respond when the public finally makes up its mind to embrace fiscal sanity.

Norman Poltenson is publisher of The Central New York Business Journal. Contact him at npoltenson@cnybj.com

Here is a piece of corruption that is all too common among politicians. 

The guy who is about to be elected the next mayor of the Big Apple, Bill de Blasio, was formerly a Brooklyn city councilman. Sometime around 2005, his wife, Chirlane McCray, was looking for a job. So, he introduced her to the CEO of a hospital in his district.

On the city council, de Blasio had pushed for millions of taxpayer bucks for the hospital, Maimonides Medical Center. The hospital had good reason to be grateful to him. It had reason to believe it might be punished if it did not find her a job.

But, Maimonides had no job open. So, it created one — just for the councilman’s wife. Funny that. Because various city hospitals have found many jobs for wives and friends and relatives of politicians. These happen to be politicians who stream millions of dollars to the hospitals. It’s all just a coincidence, of course.

Such was the work of Hillary Rodham Clinton at a Little Rock law firm. She got the job because she was the governor’s wife. And, the firm got lots of work as a result.
Michelle Obama landed a fat job with few qualifications, at the University of Chicago Medical Center — while her husband served in a powerful political position.

If you pry, you will find thousands of these jobs all over this state and nation. They are the fruits of soft corruption. The type of corruption too many of us accept. We just shrug and say, “What’s new? Politicians have always done this stuff.”

Are these no-show jobs? Some of them. Are they nudge and wink jobs? Jobs that pay $300,000 for $50,000 worth of work? Often. 

Are they “If you know what’s good for you…” jobs? That is, if you want the tax money to keep flowing your way, you had better find a job for my wife/pal/nephew. Yes, many of them are such positions.

When Monica Lewinsky held a razor to Bill Clinton’s political throat? His pal Vernon Jordan hit up some big companies to find a big job for the temptress. To shut her up. Companies responded rather than risk the back of the hand of the president.

So, you shrug this off. You say it doesn’t hurt you in any way. Maybe it doesn’t. And maybe it does.

How many bucks — your tax dollars — get wasted this way? How many millions are shoveled to projects only because somebody needs to be rewarded? How many legitimate candidates lose out on jobs because they have no connections to elite political figures?
Meanwhile, how much do the inefficiencies cost? Those that come from unqualified people filling jobs they screw up.

We cannot know. But we cannot deny that this corruption carries a price tag.
It also breeds cynicism among those who work under such appointees. And among those who know about this stuff and never bother to apply for jobs — because they know the game is rigged.

It breeds a cynicism among voters. They lose faith in a system that allows and encourages this stuff. They come to believe that one hand washing the other leaves both hands filthy. In Albany. In city and town governments. In Washington, DC.

If enough of us dwell on stuff like this, we could come up with a new dance. C’mon, everybody, let’s Shrug! During the dance, somebody picks your pocket. 

From Tom…as in Morgan.

Tom Morgan writes about political, financial, and other subjects from his home near Oneonta, in addition to his radio shows and new TV show. For more information about him, visit his website at www.tomasinmorgan.com