There was a time in America when people wanted to leave things better than they found them, when we put the well-being of future generations above our own, when honesty and responsibility meant something, when you didn’t spend what you don’t have.
Not anymore. Today we are leaving the next generation almost unbearable and insolvable problems while we live unsustainable lifestyles artificially enabled by borrowing and spending, and an addiction to fossil fuels.
The federal debt is evidence of our collective irresponsibility, and it’s not all that hard to understand — we are spending far, far more as individuals and as a nation than we are bringing in. And we are passing that debt on to our kids with no plan whatsoever for how to pay it back.
In spite of presidential and congressional promises to balance the budget, in spite of President Donald Trump’s “promise” that the tax cuts would “pay for themselves,” the deficit for this year just topped $1 trillion. That brings total federal debt to more than $22.5 trillion — and the debt-to-GDP ratio is now at the highest level since World War II and rising fast.
Think about that. At a time of economic prosperity, instead of using the opportunity to pay down the debt, we are instead now proportionately almost as deeply in debt as the nation was when it emerged from a world war! And it’s getting worse. The non-partisan Congressional Budget Office projects that if the 2017 tax cuts are extended, the debt will exceed 100% of GDP by 2029.
Carrying all that debt is expensive. Net interest payments on the debt will likely be at least $393 billion this year, with total interest (including payments to trust funds) exceeding $593 billion. That is more than all the federal money spent on children’s health and education, and it will soon exceed spending on national defense. By 2028, interest payments are projected to exceed the staggering sum of $914 billion a year.
In addition to irresponsible tax cuts, another key debt driver is entitlement spending. Beginning in 2020, the total spending on Social Security will exceed total payroll tax and interest income — and that will continue, unless there are policy changes, for the foreseeable future. Medicare and Medicaid are facing their own fiscal challenges, and growing numbers of retirees add to the costs of health care every day.
Given these alarming numbers, one might hope the president and Congress would take action now before things get worse. Unfortunately, they did take action that made things even worse. The Bipartisan Budget Act that recently passed added an additional $1.7 trillion in deficits over the next decade, according to the non-partisan Committee for a Responsible Budget.
But wait, there’s more.
The federal debt is only part of the picture. Total outstanding U.S. consumer debt now exceeds $3.9 trillion. About a third of that is credit-card debt that now stands at a record high (with the extraordinary interest costs — rates are averaging 16.86% now — and total interest payments of $113 billion in 2018). At the same time, one out of three baby boomers has less than $25,000 in retirement savings, while 21% of all Americans over 18 have no retirement savings at all.
Total corporate debt is also at an all-time high, reaching almost $10 trillion, according to Security and Exchange Commission Chairman Jay Clayton. This reflects a rise from 65% of GDP in 2013 to 74% today, nearing levels preceding the 2008 financial crisis.
The nation also has an enormous infrastructure debt. The American Society of Civil Engineers estimated in 2017 that $4.59 trillion needs to be invested in the nation’s roads, waterways, airports and other infrastructure by 2025. Again, at a time of prosperity are we dealing with this deficit responsibly? No.
Learning of all this, young voters in America, and those too young to vote, may well want to cast “a plague on both your houses” because both major parties and their leaders have contributed to the problem.
Candidate Donald Trump promised to eliminate not only the annual deficits but the entire national debt over a period of eight years. That was an outlandish lie. In fact, far from being reduced, the debt will have grown by trillions of dollars by the end of his four-year term. Republicans in Congress and Trump gave money (yet again) to corporations and the very wealthy through tax cuts that certainly did not pay for themselves. The Republicans also promised their own new spending, including the much vaunted “wall,” subsidies to farmers to pay off trade war costs, large defense increases and others. And do not forget, Trump promised “insurance for everybody” and assured us there would be “no cuts to Social Security, Medicare and Medicaid.”
Barring wildly unrealistic economic growth, it is simply not mathematically possible to balance the budget while cutting taxes, increasing spending and promising not to touch entitlements. Any Republican member of Congress who accuses Democrats of being socialist or fiscally irresponsible can only do so with the utmost dishonesty about their own policies and promises. And what of the “tea party” Republicans who once claimed to care about the debt? Their moral and political hypocrisy is nowhere more transparent than in their enabling of the president’s fiscal recklessness and in his usurpation of congressional authority.
On the Democratic side, the candidates for the 2020 nomination might have considered reaching out to young people by taking on the debt just as they have quite responsibly taken on climate change — the other great threat to the future.
Instead, with a few notable exceptions among the candidates, they have either largely ignored the problem or proposed to worsen it with their policies. In the first four hours of early Democratic debates, the word “deficit” was never mentioned, and the debt was mentioned only once. In last week’s debate, the topic was briefly mentioned in the context of health-care proposals, but it was never a serious focus of discussion by any candidate. What was put forth were multiple promises of increased spending with only vague calculations of how to pay for it all.
And that’s how we got where we are today.
Who will ultimately suffer from all this? Our children.
The good news is, there are viable ways of dealing with all of these problems responsibly and thereby gradually lowering the annual deficits and the overall debt. But the longer we wait, and the more willing we are to accept the false promises of false prophets, the harder it will be to enact those solutions. Trump and the Republicans in Congress have clearly failed to solve the deficit, and in fact they have made things much worse.
The question now for the Democrats, and for voters, is: Do you have the guts to say, do and vote for what is right rather than what is easy?