It’s shocking how fast the rate of borrowing by the federal government has shot up. But in all the giddiness, nobody seems to care anymore about soaring deficits — if they ever did.
Last month, when the CEO for Alaska Airlines announced he would give surprise $1,000 bonuses to all his employees, he portrayed the money as a sort of manna from heaven.
“There are moments in life — and in the history of a company — when you receive unexpected benefits,” CEO Brad Tilden wrote, citing the new tax-cut law passed by Congress. “This is one of those times, and we want to share some of this benefit with you.”
Everybody was thankful, and why not? Coming right after the holidays that’s a much appreciated shot to the bank account.
The group Americans for Tax Reform reports this trickle-down reward ceremony has happened at 330 companies around the country — proving that the tax-cut law is a boon. The group quotes Steve Wynn, a casino mogul who was also giving out bonuses, as being positively world historical in his bullishness (this was before he was recently accused of sexual harassment):
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“With Republicans in Washington, we are seeing this fabulous renaissance,” he said.
May I interrupt this happy dance — as I often like to do — to say how delusional this all is?
Those bonuses, nice as they are, are flat-out borrowed money. The manna, the “unexpected benefits” — they’re a loan. A cash-advance on the nation’s credit card.
This is not just my say on the matter, but the take-away from the group that tends to the national debt. Last week the U.S. Treasury Department quietly announced it needed to borrow almost a trillion bucks this year — up 84 percent over 2017. That’s the largest yearly increase in debt since the banking-industry bailout in 2008.
The causes are the tax-cut law, said the Congressional Budget Office, and spending that wasn’t paid for, such as a record disaster-relief package.
It’s OK to run deficits, even big ones during slack times. But what’s alarming is that nobody cares, not least the gushing CEOs, that we’re now racking them up when it’s completely unnecessary. When the economy is strong.
Last year, the government borrowed $519 billion (a low in the past 10 years). For this year, though, Treasury is asking for $955 billion in debt. With talk of breaking congressional spending caps, that number is likely to top $1 trillion.
A $1 trillion deficit would be 5 percent of the gross domestic product, a figure it has topped only twice in the past 50 years — during the big recessions of 1982 and 2008.
“Nobody is talking about paying for anything anymore,” says Maya MacGuineas, president of the never-listened-to Committee For a Responsible Budget.
The debt didn’t rate one mention in the State of the Union speech. In Congress, according to a search I did of the Congressional Record, discussion about debt or deficits hit a fever pitch in 2012, with 3,425 total mentions (that means it was brought up 20 times every day Congress was in session). But last year, when all this fresh red ink was being ladled out, it was mentioned only 1,190 times — an average of six times per day.
It’s being completely ignored in the current political campaigns. Few of the four Republicans or 21 Democrats running active federal campaigns for the 2018 election in Washington state make any mention of the debt or the nation’s finances on their websites. And none show plans for what to do about it.
The what-me-worry mood was captured by retiring Rep. Dave Reichert, R-Auburn. He waved away the notion that cutting taxes will balloon deficits as just “talking points.” In a recent Seattle Times interview, he cited the bonuses as evidence the “trickle-down economic theory” is working, and said he was unfazed by all the deficit hoohah.
Oookay. I wonder then how it is the nation’s borrowing suddenly is skyrocketing?
I know, everybody loathes this perennial issue. It’s all boring talk of scruples and sacrifices and eating your broccoli. All I can say is: This one’s different, in one crucial way. We have never blown up trillion-dollar deficits before during such fat times.
Sure, maybe it will all rain down and blossom like the renaissance. But I’d hang onto some of that bonus money if I were you.