In a former life, I was a regular contributor to the editorial pages of the Marietta Daily Journal, my hometown newspaper. In January, 2011, what seemed to me then to be a staggering number caught my attention and prompted a column in which I noted that Congress was gearing up for a partisan showdown on increasing the federal debt ceiling which is the amount that the federal government is legally able to borrow. The debt limit at that time was $14.3 trillion. Since January, 2007, when Democrats took control of Congress, until January, 2011, the debt limit increased almost $4.5 trillion. The debt ceiling was almost three times higher than it was in 1996. Although I was highly critical of the Obama Administration and Congress for continuing to max out the national credit card, I did point out that administrations of both parties bear their share of the blame for the increase.
In fact, the U.S. Treasury website states that:
“Congress has always acted when called upon to raise the debt limit. Since 1960, Congress has acted 78 separate times to permanently raise, temporarily extend, or revise the definition of the debt limit – 49 times under Republican presidents and 29 times under Democratic presidents. Congressional leaders in both parties have recognized that this is necessary.”
With wistful eyes, I now long for the “good old days” of federal debt of $15 trillion, because when President Trump took office, the federal debt was $19 trillion, and it continues to climb. I am old enough to remember that during the 2016 campaign, Trump claimed that he wanted to eliminate the national debt in eight years. (Sigh.)
As of last week, the federal debt exceeded $24 trillion. Take a second and go to www.usdebtclock.org for an eye-popping chart of Federal and State finances in real time.
I say all that to say this. And before you say, “yes but…” please understand that I get it. I really do. Because of the Coronavirus, the American economy is in a government induced coma mandated by a patchwork of stay at home and shelter in place orders. That cannot continue for much longer without doing potentially fatal harm to any prospects for recovery. On the other hand, President Trump and Congress have already passed the $2 trillion plus CARES Act and, as soon as the political posturing is hashed out, Congress is poised to pass additional stimulus measures which will supplement the earlier bills. And don’t forget that the President has also advocated for an infrastructure stimulus measure of another $2 trillion because “we can borrow the money at almost zero interest.” Mercy.
The theoretically non-partisan Congressional Budget Office has given its preliminary analysis of the CARES Act. According to the CBO, working with the Joint Commission on Taxation, the CARES Act will increase deficits by $1.8 trillion between 2020 and 2030, with the greatest impact being felt in 2020, in which the current budget deficit was already projected to exceed $1.1 trillion before the onset of the COVID-19 pandemic. Lately, it seems that the government defaults (and I use that term carefully) to funding deficits by borrowing, and borrowing, and borrowing some more.
Do the math. Any honest and clear-eyed assessment of America’s fiscal condition leads to the inescapable conclusion that the current track leads to an abrupt dead end at some point. Admittedly, I am not an economist, but no country, not even the United States with its prodigious economic strength and potential (which is currently under a great amount of stress) can sustain this level of borrowing and spending. Even without the unpredictable advent of a global pandemic, the President has apparently abandoned his campaign promise to eliminate the federal debt. Instead, he and others are advocating heaping more and more debt and spending on amounts of debt and levels of spending which, at some point, have to be brought under control.