Well, what are we to make of the preceding posts about
priorities? Here is my summary:
1. The
United States is living well beyond its means – more than half a trillion
dollars a year above its means. Every federal program and federal agency has
its supporters who will argue that killing it would be unfair, short-sighted,
mean-spirited, and disastrous to the (choose one: economy, environment, the
elderly, the young, the disabled, etc).
And they might even be right. But however worthy the causes, at our
current tax rates we simply can’t afford what we are spending.
2. If
we continue to run deficits and grow the federal debt there will come an
accounting, perhaps not in my lifetime (I’m old) but certainly in the lifetime
of my children and grandchildren. It may
come slowly, being resolved by painful hyperinflation that eventually makes US
bonds worthless, along with everyone’s savings. It may come quickly, if
suddenly one day the world loses confidence in America’s fiscal position and
the Federal Reserve finds it can’t roll over the debt because no one is willing
to buy US bonds at the weekly auction at a reasonable interest rate. But it will come.
3. The
solution is obvious, but probably unattainable given the way American politics
works. The solution would be (a) to cut back federal expenditures to support
only the most essential things – the things that keep the nation safe and the
economy strong, and (b) raise taxes across the board by 20% or more, so we can
pay down the debt a bit, and (c) find some mechanism to force Congress to spend
the extra revenue on paying down the debt instead of spending it on popular
vote-getting new programs.
Think of these things the next time some media pundit
laments a Trump proposal to cut the budget for some federal agency, or the next
time Trump proposes to spend a lot more money on something like a border
wall. This is not a Republican or
Democratic problem, or a liberal or conservative problem; this transcends
political parties. Both are guilty of leading the gullible America voters to
this untenable situation, and both are equally unrealistic and irresponsible
when in power. Hillary Clinton would have been no better at addressing this
problem; indeed she might have been worse if Obama’s administration was any
indication.
The only people who seem to have a realistic outlook on the
problem are the few budget hawks in Congress, many in the Tea Party movement.
It is a promising development that Trump appointed one of these, Rep. Mick
Mulvaney (Rep. South Carolina), to run the OMB (Office of Budget and
Management). But there is certainly not
a majority in Congress, in either party, for being responsible and undertaking
the difficult and politically painful task of reducing the federal deficit and the
national debt. And Trump’s current tax
reduction proposals, popular as they may be with voters and businesses, look
like they will make the problem worse, not better.
But of all the issues that face America these days, I think
perhaps the single most important one is getting our fiscal house in order and
our addiction to debt-financed government programs under control. And few are paying attention to it.
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