Victory Bonds

With another tough day on Wall Street and another likely tomorrow if the Asian markets are an indication, perhaps the candidates might want to think about a program from the past: Victory Bonds. These are the bonds that were bought by average citizens to help finance World War II. A similar program now would help citizens save and invest for their retirement, but also help finance many of the imperatives necessary to put our country back on track while we weather the financial crisis.

Since George Bush initiated his pre-emptive wars in Afghanistan and Iraq, the funding has been all done outside of the budget. When combined with the Bush tax breaks and other increases in spending, the net result is another big deficit. As reported today in the New York Times the deficit for the fiscal year that ended on September 30th was $455 Billion. This is 3.2% of our Gross Domestic Product, and is up from 1.2% last year. What this means is that we have been living as a nation beyond our means. As I have mentioned before in this blog, this is irresponsible, unfair to future generations, and now unsustainable in the current global economy. What this also means is that both candidates are promising agendas that they can not deliver. They can't cut taxes, deliver all the current government services, and invest programs for the future.

That's where a 21st century "Victory Bond" program could be the key to the future. The silver lining in the current financial crisis is that Treasury bonds are costing the government less because people and international investors are taking money out of the stock market and putting it into US Treasury bonds because they feel that they are still safe. If the Treasury had a 21st century equivalent, perhaps "Freedom Bonds," we could finance programs for energy independence, rebuilding infrastructure like roads, bridges and the electrical grids, and also invest in education, health care, and jobs retraining. These bonds could also be "tax free" bonds so that ordinary citizens would be able to save for their retirement while investing in the country. Tune into the debate tonight to see if they can figure this out. That would be putting America First.