Imagine that the company you work for is millions in debt, and is continuing to spend millions more than it’s taking in.
And that’s after the boss pilfered your retirement funds and used them on day-to-day operations.
Imagine further that every so often, the executive staff of your company has to meet just to agree to borrow more and find a way to keep the lights on.
We hope that doesn’t describe your company – because it wouldn’t last very long.
But it does describe your country.
Except that the debt, and the deficit spending, is in the trillions.
Republican members of Congress just celebrated their year-end tax overhaul – as well they should. It was a very difficult, complicated, delicate package, the likes of which we haven’t seen since the 1980s.
But as arduous and convoluted as the tax cuts were to enact, it was still playing Santa Claus. There isn’t a chapter on letting Americans keep more of the money they earn in the book Profiles in Courage (though it was written by John F. Kennedy, another tax-cutting president).
Now Washington needs to show real leadership – through cutting annual deficits and accumulated debt by cutting spending.
We’re frankly surprised by how little interest our first businessman-president has shown in cutting back the size and reach and cost of government. Mr. Trump certainly has done a few high-profile things to demonstrate frugality, such as negotiating lower costs for some military planes. But as laudable and refreshing as that is, it’s a drop in this nation’s Red Sea of debt.
We also differ with the president when he sees no need to cut mandatory spending, such as Social Security, Medicare, Medicaid and interest on the debt, which consumes nearly 70 percent of the federal budget now – and which, if unabated, will eat up over 80 percent of federal spending by 2047.
While the tax cuts should spur growth in the economy and in federal revenues, experts say the cuts will add a trillion or more in debt over the next decade. Whether true or not, the experts we’ve consulted have told us flatly that there is no way America can grow its way out of the crater of debt we’ve dug for our children.
We simply must rein in our spending.
Which neither party seems willing to do.
House Minority Leader Nancy Pelosi and other Democrats briefly got “debt religion” during the tax cut debate, expressly to hammer the GOP. “Republicans are still adding trillions to the deficit,” Pelosi compained – apparently oblivious to the $8 trillion in debt that accumulated during the Obama administration.
Democrats as a whole do, indeed, appear quite loath to cut even projected increases in spending – which, in the real world, isn’t even a cut. But debt watchers don’t have too many friends in Republican congressional circles these days either.
One of the most stalwart deficit hawks is Sen. Rand Paul – who has a digital debt clock whirring on his government web page, and jokes that when it comes to money management, Washington, D.C., has “Dinosaur Syndrome: Big hearts, small brains.”
In a kind of Mr. Smith Goes to Washington moment Dec. 19, Paul brilliantly excoriated his colleagues for failing – 30 times now – to abide by spending caps instituted in 2010. And he warned him of the potentially disastrous consequences of continuing to kick the budget can down the road – as they’re doing now: Congress is debating how to fund the government after Jan. 19, when it officially runs out of operating cash.
Short answer: Eventually, they’ll agree to borrow more and raise the debt ceiling further.
Paul reminded his colleagues that they borrow about a million dollars a minute to finance the federal government – and that our $20 trillion-plus national debt is now bigger than what we produce as a nation in a year.
Republicans talk a good debt-reduction game – and Democrats are the ones who instituted the 2010 budget caps. But, Paul said in his floor speech, both sides want more spending, Republicans for the military and Democrats for welfare – and each has to acquiesce to the other, so spending spirals upward.
“Ultimately, there will be a day of reckoning,” Paul told them. “You cannot continue to borrow so much money. Ultimately it bankrupts the nation, or the currency becomes worthless – or you get to a point where the interest on the debt actually becomes the No. 1 spending item”
That point is expected in about a decade, he said. All because Congress ignores its own pay-as-you-go “PAYGO” rules that require living within its means.
All those pet programs on both sides? “You’re going to have none of that if you keep spending money at this rate,” Paul told his fellow senators. “We’re going to ruin the country with debt.”
He’s absolutely right.
Yet, it remains that a careerist Congress with no term limits and one eye always fixed on re-election actually has a perverse incentive to spend more than it takes in: It makes members, and the nation’s fiscal situation, look better than they really are.
Question: How can this possibly last?
Answer: It can’t. The only question is how and when it all ends – and how much damage our current and recent politicians will have done to our country.