I wanted to comment on the current debt ceiling discussions, but thought I would check my past posts to see what I have written before. Here are links to the two posts I found relevant. They were written in 2011, after the midterm elections during Obama's first term in which he lost the House because the Dems lost 63 seats. It marked the beginning of the Tea Party Movement, a phrase not used much today, but only because our national politics now includes the hard line fiscal caucus of the right, who chirp a bit about the national debt during GOP presidencies but become apoplectic during Democratic ones, as they are now.
https://wurdsfromtheburbs.blogspot.com/2011/08/loserswinners-in-recent-debt-ceiling.html
https://wurdsfromtheburbs.blogspot.com/2011/08/unexpected-waterfall.htm
I say that last bit because during Obama's 8 years the national debt increased by over 8 billion dollars, which is a huge number, yet during Trump's 4 years the national debt also increased by 8 billion dollars, which did not generate nearly as much outrage as was expressed by the Tea Party during Obama's years or as compared to what is happening today. Don't get me wrong, both sides of the aisle are guilty of spending money the country doesn't have, and both are certainly hypocrites when it comes to national debt fear mongering, accepting blame, and actual solutions.
Here is an interesting article with 2 tables that display info about the national debt as it relates to presidential terms. The first details starting point, ending point, percentage change and total amount of that change. The second shows average debt accumulation per year for each president accept for Harrison and Garfield who died within a year of election.
A quick examination of the numbers for the 21 presidents since 1900 beginning with Teddy Roosevelt who became president in 1901 with the assassination of McKinley, results in the following interesting tidbits.
9 Democrats, 12 Republicans
Biggest increase in aggregate, Obama and Trump, each with over 8 billion dollars, followed by Bush 2 with over 6 billion dollars accumulated. Biden is already over 2 billion, an amount no other president in history, let alone since 1900, had exceeded.
Highest increase by percentage (other than Wilson and FDR who each oversaw massive increases in the national debt during WW1 and WW2) was Reagan at 186%, then Bush 2 at 105%, Obama at a bit under 70%, Bush 1 at 54%, then Ford, Carter, Trump. Three of the top four were Republican, as were six of the top eight.
Average debt percentage increase per year, again excepting for the World War presidents, Reagan, Ford, Bush 1 in the top 3 spots, followed by Carter, Bush 2, Trump then Obama. Top three all Republicans, five of seven from the GOP.
Clinton, who I facetiously refer to as the best Republican president we have had in my lifetime, has the lowest yearly average of national debt increase since 1970, and was the last president to preside over a yearly budget surplus.
One last interesting piece of data is the reference to the inflation rate. Up until the last 30 years, low inflation seemed to correspond to lower increases in the national debt, higher rates of inflation to higher spending. Now, low or high inflation, the debt increase has been exorbitant since LBJ, with only Nixon and Clinton recording average yearly changes below 7%.
https://www.self.inc/info/us-debt-by-president/
If no party is above reproach, as the charts above indicate, then it is painfully obvious that both need to contribute to a change in direction. The last 40 years especially, have marked a dramatic turn in federal spending. I mentioned in a previous post that state spending during this time period, by percentage, has not risen as dramatically as federal spending. If it is because states can spend less knowing that Uncle Sam will kick in the rest, or because more federal spending has been required to meet the shortfall of lower increases in state spending, I would not hazard a guess. I do know that previous research indicates to me that in regards to education spending, states are lagging, but even this does not explain why we are spending so much more than we are collecting.
I made a sarcastic reference to supply side economics earlier in this post. I have little doubt that the changes in the tax structure that Reagan initiated during his two presidential terms, has played a role in the deficit, although more from the collection end than the spending side. Tax rates for the wealthy have declined dramatically since the 1960's requiring more monies to be collected from wage earners in the middle and upper middle classes. Don't let anyone tell you that the rich pay their fair share of taxes; the data is clear that a huge transfer of wealth has occurred towards the top end of wage earners in the last 60 years. Put simply, while the federal minimum wage has increased in small increments, and hasn't been adjusted at all since 2009, the percentage of wealth owned by the top 1% has leaped dramatically.
Collections have not kept pace with spending needs. And, now that it has been well documented that the IRS needs more funding, it is the monied interests of America that are caching the debate in terms of armed IRS agents taking your guns away, all the while knowing that by even the most conservative estimates, the rich are cheating the American government (and everyday taxpayers) of tens, if not hundreds of billions of dollars a year. It is another example of how the 90% of us need to be inoculated from the propaganda of the rich who continue to try to drive wedges in the collective us by claiming the IRS will be after the average wage earner, when it is really the rich who will be, and need to be targeted for tax fraud, tax loopholes, and "creative" accounting.
But again, that is only half of the ledger. Spending is also out of control. Everyone acknowledges it, but no one wants to be the first to volunteer to take less money. Are we just too selfish to solve this problem?
As an older American, I generally turn away when I hear people say things like, no one wants to work today, or things were so much better when I was a kid, or other platitudes that tend to reflect memories that are mostly just a reflection of being jealous of those who are younger than ourselves. Mortality is a cruel mistress, as I am sure someone famous once said. When we begin to filter our perceptions through the realization that our best days are behind us, or worse, when we question whether we made the most of our lives, it is easy to direct invectives at those who still possess their youth.
Yet, I do believe we have become too selfish, certainly more so than those born in the first 40 years of the 20th century. We all want someone else to receive less federal assistance, but bristle when asked to give up something ourselves.
Again, some of this is the result of the rich using their resources to create narratives about various parts of the middle and lower economic classes, which we read and believe without researching the veracity of their claims. Welfare queens who lived off Uncle Sam's teat, eating steak and having the latest techno gadgets was mostly a bunch of hogwash when propagated by the wealthy, yet was believed by millions, while, in the meantime, those with the most, especially big corporations, were awash in federal money. Depending on which research you access, it is estimated that if corporate welfare through tax incentives, political capitalism (granting exceptions to the rules that everyone else must follow), and, not to mention, cronyism and corruption, were to be assigned a monetary amount, it would far exceed the money paid to those on welfare. And, just to remind you, children make up a significant percentage of those who benefit from welfare.
Still, the question remains, how do we reduce federal spending, or at least reduce the level of increase?
I would look more carefully at corporations which earn huge profits and reduce or eliminate any subsidies they receive. The fossil fuel industry is an easy target, especially in light of the rise in gas prices in conjunction with the rise in fossil fuel companies' record profits, yet they are still receiving billions in federal subsidies. Why?
I am also sure there is much waste that can be eliminated. The Covid relief money, which was certainly a necessary expenditure, was not tracked well, and not targeted as precisely as it should have been. As is the case in many federal spending programs, means testing is not stringent enough. Those who need it should continue to receive assistance, but those who get help due to fraud or favoritism, should be winnowed from these programs. Unfortunately, better review of these policies, would require more civil servants, a proposal that is not popular, although, as I have said before, some of those who fight against more civil servants to monitor our spending, do so because they are receiving money they shouldn't, or cheating and don't want to get caught, or are the beneficiaries of corruption that is not being revealed due to a lack of public servants.
One thought would be to tie future federal budget increases from year to year to the inflation rate, so that when inflation is high, spending would increase, but when inflation is low, spending increases would stay nominal. No reason to increase outlays by 5, 6 8% if inflation is at 2%.
Still, we are talking about trillions of dollars a year in deficit. That is why we need a framework for a plan that reduces the yearly deficit consistently, year over year, until we can achieve a balanced budget some time in the future. How far out? Perhaps ten years, which sounds like a long time, but, hey, we haven't had a balanced budget since 1990, so that is pretty good in comparison.
But always remember, a balanced budget should not necessarily be so sought after that it becomes a straitjacket. Unanticipated events require expenditures which may not be budgeted for, so there must always be room for deficit spending when necessary. That is one main reason why this artificial, politically driven debt ceiling crisis must be eliminated. Hash out spending priorities when creating budgets, not after spending has already been approved.
Some might say that we are currently at the $30+ trillion debt ceiling because of Covid, which was certainly unforeseen. Could we have spent our money more judiciously during these past 3 years while battling the effects of the pandemic, sure, but fighting over an artificially created debt ceiling because we helped millions of Americans survive the consequences of the onset of Covid, the lockdowns to suppress its spread, the gradual recovery of jobs, not to mention the global supply chain disruptions, makes little sense.
There are many hands involved when a society glorifies consumerism and a keeping up with the Joneses philosophy, allows the cost of living to outpace income increases, hands out credit cards like penny candy, allows the cost of education and medical care costs to escalate by double and triple more than wages, and then doubles down on the power of money through a Supreme Court ruling that equates money with free speech. Throw in the fact that we barely blink when athletes, CEO's, entertainment stars, and the like routinely earn as much money in two weeks as millions of Americans make in their entire working life, (50 million dollars a year is about 1 million a week, the average salary of $50K a year times 40 years is $2 million), and yes Virginia, we have a spending problem and a revenue problem.
Is it any wonder why creating a national budget is so difficult?
And no wonder that when all is said and done, this current iteration of the debt ceiling crisis will do little to address the real problems, both sides will claim victory, average Americans will most likely lose some type of benefit, and the super rich will laugh all the way to the bank.
But hey, at least drag queens will be swept from our lives!
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