The New York Federal Reserve Board reported in May 2012 that U.S. Household debt, including home mortgages, consumer credit, auto loans, and student loans totaled $11 trillion, down a little since 2011, as families adjusted what they owe to a more tolerable level.  In contrast, Federal debt grows steadily and stands at $16.6 trillion.  Big spending politicians feel it’s their divine right to pile more debt on families than families are comfortable with.  You, your children, and probably grandchildren will be forced to repay the massive federal debt, plus your own household’s debt – there is no way around it.

The best ways to limit growth in the debt pile is to find good jobs for American workers and force government to spend carefully – not like politicians buying votes.  Even today, some politicians prescribe as many as 30 years littered with “high speed trains that connect major cities, early childhood education, and high-tech job training” before reaching a balanced budget.

Meaningful jobs are created when investors see three factors aligned: market demand, reasonable cost of capital, and cost-efficient employee skills.  When those conditions are right, they can earn a profit from new investments.  Following 2009’s stock market trough, the private sector has been creating jobs slowly.  It expected increasing demand for some goods and services.  Interest rates have been very low and there are plenty of skilled workers.  Productivity levels have been gently volatile in 2012.

Looking ahead, interest rates will rise when the Federal Reserve reverts to its focus on inflation instead of pinch hitting at elected-Washington’s job of fiscal management.  To offset rising interest rates as an investment incentive, increases in market demand would be needed.  Fortunately there are some large scale private sector market demands that will improve the US economy.  If government can resist the temptation to regulate and tax, the following projects will produce well-paying jobs and a more resilient US:

  • Exploit “big data and cloud technology” for efficiencies in product promotion and service delivery;
  • Permit rational development, distribution and export of tight oil & gas.  Encourage nuclear, wind, solar, and geothermal power in the national portfolio to gives us energy sufficiency;
  • Control cyber-threats of criminals and adversary nations without unreasonable privacy loss;
  • Achieve ubiquitous electronic health records, advanced pharmaceutical and genetic treatments to tame the major health challenges in the US, and substantial cost containment; and
  • Use distance education and internet-delivered courseware as a highly effective norm for most university-level and high school electives.  Align teacher pay with productivity.

Each project is similar in scale to the 1960’s “man on the Moon” project.  These projects call for government cooperation and in some cases funding, although most need just private sector investment.  None is uniquely the province of one domain or the other.  Each will employ armies of skilled American labor, and will produce plenty of income tax to retire federal debt.

Alan Daley is a retired business man who lives in Florida and who writes for The American Consumer Institute Center for Citizen Research