Where are the adults in D.C.?
The economy is on a deficit spending-induced high, and it won’t last
The New Hampshire primary is behind us, with all its sound and fury signifying whatever. One thing which was startling in both parties, with the exception of occasional comments by Bill Weld, was the total absence of mention of or questions about the federal debt and deficit.
As they do every four years for a winter term course, political science students from St. Olaf College in Northfield, Minn., came to New Hampshire for most of January and the beginning of February to learn about and participate in the primary, with most students volunteering for the campaigns of various Democratic candidates. Their professor, Dr. Dan Hofrenning, brought them to our offices one morning to discuss New Hampshire government and politics and to hear the views of a “traditional Republican.”
During the discussion, the students variously defended the spending plans of Senators Sanders and Warren and others. They were somewhat disquieted when I pointed out to them that we have $1 trillion dollar-per-year deficit in federal spending, and I challenged them to find the trillion dollars in increased revenue and reduced spending before they spend a dime on any new spending.
It had not occurred to the students that the candidates had only occasional plans for paying for new programs, without any plan to reduce and eliminate the historic deficit.
On the heels of the primary, President Trump released his budget for fiscal year 2021. Reporting on its effect, and the spending in Trump budgets to date, The New York Times stated that the budget proposes federal spending of $14,652 per person in the country. This is an increase of $1,441 per person since 2016. During the same time, due to tax cuts and the effect of the economy, revenue has increased by only $125, which accounts for the ever-increasing deficit.
To pay for this on a per capita basis, a family of four would have to pay $58,608 in taxes. This from an administration which makes the false claim to be “conservative.”
In one of his most candid but cynical statements on the subject, Trump was quoted as saying that he will not be present when the effects of the deficit are felt, so it is “not my problem”!
This historically huge deficit spending, in peacetime without any fiscal crisis, explains why the economy is doing well and Trump can claim credit. There is $1 trillion being pumped into spending without paying for it. It is borrowed money. The economy is on drugs, and when withdrawal comes, so will the headache, or worse.
A look at history demonstrates the increasing problem. In 1790, the first year the national debt was calculated, it was $71 million, after the federal government assumed the Revolutionary War debt of the states. It dropped as low as $34,000 in 1835. The Civil War raised it to $2.6 billion in 1866, which was paid down to $1.5 billion by 1893. World War I resulted in a $26 billion debt by 1920 and the Great Depression spending raised it to $36 billion by 1937. World War II raised the total to $269 billion in 1946, but most of that was owed to Americans who bought “war bonds” marketed through a patriotic appeal (not to foreigners, as now).
The year Eisenhower became president, 1953, the debt was $266 billion, and it was $286 billion when he left office eight years later. In 1969, after the Great Society and Vietnam, the debt was $354 billion. In 1982, after a recession and tax cuts, the debt reached the $1 trillion mark for the first time in history — $1.142 trillion, rising to $2.85 trillion by 1989, due to the combination of Reagan tax cuts and the failure to decrease spending.
In 1993, after the first President Bush, it rose to $4.4 trillion, and growth slowed in the later 1990s under the Clinton-Gingrich budget deal.
Bush II started with debt at $5.8 trillion, and ended eight years later at over $10 trillion. The Obama years saw the debt just about double to almost $20 trillion, and that was before the Trump tax cuts, which now have it growing at more than $1 trillion per year.
This is an unsustainable, bipartisan failure, and yet almost no politician talks about it and no reporter asks about it.
Where are the adults in the room? We better find some.
Brad Cook is a Manchester attorney. The views expressed in this column are his own. He can be reached at email@example.com.