The democrat candidates for president have an almost unending list of new programs they want to implement if elected. Among others these range from Medicate for All, to achieving zero CO2 emissions, to wealth taxes, and billions for teachers. The list goes on as the 20 candidates attempt to out bid their competition. The questions that doesn’t get asked is how are they going to pay for these promises and how are they going to deal with the national debt under control?
Our nation has a large number of problems and the next president, at best, will only be able to address a small number. One of them will not be a program to reduce the national debt. And as a result, it will keep growing because it is easier to kick the can down the road than to lessen the burden on future generations.
Addressing the national debt, which now stands at $22.8 trillion, up $17.1 trillion since 2000, would require an act of political courage and a willingness to be a one term president. Unfortunately, there is no evidence that such a paragon of fiscal responsibility exists.
Politicians who like spending, and that is most of them, blame our current debt and deficit problems on tax cuts and republican irresponsibility that led to the 2008 financial crisis. This is a case of convenient self delusion and what the late historian Barbara Tuchman referred to as wooden headeness—“assessing a situation in terms of preconceived fixed notions while ignoring or rejecting any contrary signs. …acting according to wish while not allowing oneself to be deflected by the facts.”
The Reagan, Bush and Trump tax cuts and a deregulation fervor are asserted to be the root of our fiscal problems. This is a case of not letting facts get in the way of a self-serving narrative. Federal revenue has grown almost every year since the Reagan tax cuts of 1983. The exception was the years involving the 2008 financial crisis when federal tax revenue shrank from 2008 to 2013.
According to The Balance– www.thebalance.com–.“The government’s annual income only pays for 77% of spending. It creates a $1.1 trillion billion.” The rest is deficit spending.
The case for reducing the debt well below the current level is powerful. The Peterson Institute has stated the case clearly, “If our long-term fiscal challenges remain unaddressed, our economic environment weakens as confidence suffers, access to capital is reduced, interest costs crowd out key investments in our future, the conditions for growth deteriorate, and our nation is put at greater risk of economic crisis. If our long-term fiscal imbalance is not addressed, our future economy will be diminished, with fewer economic opportunities …” This is also the view of most economists.
What should be done? Since politicians cannot restrain themselves, the first action is to pass a balanced budget amendment and balancing law until the amendment is ratified. There also should be the equivalent of another Hoover Commission to restructure and streamline the Executive Branch. There is obvious waste in all departments and agencies. For example, the Department of Energy was created when during a time of crisis when it was believed that we were running out of oil. Only crony capitalists would miss it now. While a strong national defense is a primary government function, do we need a $10 billion aircraft carrier and a fighter jet costing between $140 and $300 million per plane? The military services were structured to fight a World War II type conflict. They should be restructured for the conflicts of the future.
Social Security and Medicare currently represent 60 % of federal spending and the cost of those programs will only grow larger. Promises to current recipients and those nearing retirement have to be kept but saving both programs for future generations justifies changes like gradually raising the retirement age to reflect increased longevity, raising the earning limit subject to the payroll tax and indexing it for inflation, increasing the Medicare payroll tax by 1% and also the surtax on earning of $200,000 or more.
Burdening future generations with a debt that will make them poorer should be a strong incentive for politicians to find common ground. The fact that Congress ignores this crisis is disgraceful.