It has become a trope among many on both sides whenever a big
news story breaks to ask, “What are they not wanting us to pay attention to?” I’m
not a conspiracy theorist, but I will admit that today’s firing of National
Security Advisor John Bolton overshadows what is, in reality, a much more
pressing issue. As both sides react to Bolton’s ouster and even people who, as
recently as yesterday were critics of the mustachioed advisor, weigh in on how
his departure is a bad sign for the president, what many people are missing is
the news that the federal budget deficit just exceeded $1 trillion.
In a report released on September 9, the Congressional
Budget Office noted that the deficit for the first eleven months of the
2019 fiscal year was $1.067 trillion, which was $168 billion more than for the
same period in 2018.
The historic deficit occurred as both revenues and spending
increased over last year. Per the CBO, “revenues were $102 billion higher and
outlays were $271 billion higher” than the first eleven months of 2018. Expenditures
increased by seven percent, a larger rate than the three percent increase in total
revenues, which accounts for the larger deficit.
I’d like to say that the lack of an outcry from Republicans
is surprising, but it wouldn’t be true. At this point, it is no longer shocking
that fiscal hawks from the Freedom Caucus and elsewhere are silent on the issue
of Trumpian spending. Even Mark
Sanford, the newest Republican challenger who is running on a platform of
fiscal conservatism, was didn’t mark the occasion.
According to the White House Office of
Management and Budget, the last year that the US ran a trillion-dollar
deficit was 2012 when the red ink totaled $1.076 trillion in the wake of the
Great Recession. Given that President Trump’s deficit this year is already at
$1.067 trillion, it seems likely that Mr. Trump will exceed Obama’s spending
level by the fiscal year ends on Sept. 30.
What makes the current budget deficit even worse is that President
Obama’s spending was justified as a response to the 2008 financial crisis. I
don’t believe in Keynesian stimulus spending but at least there was a crisis to
blame back then. The current spending levels are in a relatively stable economy.
With no crisis to avert, neither side is offering any pretense that the deficit
will ever be under control.
Both sides like to talk about the various crises that
America faces, but neither wants to face the difficult choices that will be
required to solve our budget crisis. It is easier to attack AOC and the squad
than to talk about the reality that entitlements are bankrupting our country. As
commenters illustrate whenever I point out that Social Security and Medicare
are both entitlements, even conservative voters are loathe to talk about
cutting the programs that are driving us bankrupt.
Here’s the truth: Social Security, Medicare, Medicaid, and other
safety-net programs make up
61 percent of the federal budget while interest on the debt adds another seven
More truth is that Social Security and Medicare are entitlements, not savings accounts. Your payroll tax dollars that are euphemistically called “contributions” do not go into an account with your name on it. They go to pay current recipients. The Social Security trust fund is expected to be exhausted by 2032 and Medicare will be bankrupt by 2026.
Yet another difficult truth is that we could all foreign aid
and trim wasteful spending until the sacred cows come home and we would still
have a debt crisis. Entitlements are the problem and Social Security is the
largest entitlement in the federal budget.
The YUGE national debt is the root of many of our problems. The
Fed must keep interest rates low, punishing savers and investors, because
higher rates will mean even more federal debt and a higher deficit. We are vulnerable
to China because they hold much of debt and can dump it, causing a financial crisis,
if we give them too many problems. The need to make payments on debt and
interest crowd out many other things that we could be spending money on
(although let’s be honest, not having money doesn’t stop the government from
spending). The deficit also crowds out private borrowing and leads to higher
Limbaugh was right when he said a few months ago that “all this talk about
concern for the deficit and the budget has been bogus for as long as it’s been
around.” It sure looks that way.