Las Vegas Review-Journal Editorial Board, February 5, 2022
Trying to conceptualize the amount of money that the U.S. government spends is no easy task. The late Sen. Everett Dirksen is famously purported to have said, “A billion here, a billion there, and pretty soon you’re talking about real money.” And that was back in the 1950s, when annual federal outlays came to about $70 billion — with a “b.” In fiscal 2020, Washington spent $6.6 trillion — with a “t.”
Think of it this way. If you were to spend $144,000 an hour — more than most people earn in two years — it would take you and your heirs almost 800 years to blow through $1 trillion.
Now imagine being $30 trillion in debt. In fact, there’s no need to imagine it anymore. That’s the fiscal hole in which the United States finds itself.
On Tuesday, the U.S. debt clock rolled over from $29,999,999,999,999.99 to $30 trillion. “The total debt held by the public outpaced the size of the American economy last year,” The New York Times reported last week, “a decade faster than forecasters projected.” The debt has tripled in less than 14 years.
Spending is a bipartisan problem. Republicans, who have long claimed to be better fiscal stewards, have rarely walked the walk and looked the other way as the debt mushroomed during Donald Trump’s presidency. Democrats, meanwhile — surrounded by progressive economists who believe that those who control the printing presses can churn out an infinite amount of money without consequence — continue to agitate for trillions in more deficit spending in order to sate favored constituencies and gin up electoral support.
No doubt, some pandemic-related spending, along with emergency measures from the Great Recession, was driven by unusual circumstances. But too often Congress borrows “for no reason other than politicians have stopped being willing to pay the bills,” Maya MacGuineas, president of the Committee for a Responsible Federal Budget, told The Wall Street Journal.
At some point, the invoice comes due. The Fed is all but certain to raise interest rates in coming months in an effort to fight inflation, which will only increase what the government owes to those who hold its notes. “The Congressional Budget Office estimates that if interest rates rise in line with their own forecasts,” the Times reported, “net interest costs will reach 8.6 percent of gross domestic product in 2051. That would amount to about $60 trillion in total interest payments over three decades.”
Paying interest on the debt will soon become the fastest-growing portion of the U.S. budget, although inflation could ease that burden a bit by devaluing today’s dollars. But using inflation as a debt-fighting tool is like using arson as a remodeling technique. Democrats should understand that, long term, the exploding interest payments will make it more difficult to boost spending for the discretionary outlays they favor and to firm up entitlements.
Taxing our way off the fiscal cliff is a pipe dream. Confiscating the wealth of every American billionaire wouldn’t cover our obligations. Revenues aren’t the problem — 2021 saw the biggest federal revenue surge in 44 years.
The Biden administration maintains that it is devoted to “a sustainable and responsible fiscal policy.” Yet it has done nothing to indicate this to be true. The president has been in Washington for five decades and has a long record of fiscal indifference.
But self-preservation is a powerful incentive. Polls show the debt is high among concerns for many Americans. An Ipsos survey last year found that 75 percent of respondents “agree that we should worry about the national debt and that too much federal debt could hurt the economy. … And very few Americans believe unlimited borrowing is an option to finance new programs.”
If the president hopes to stabilize his plummeting poll numbers, he might signal to voters that he takes the situation seriously and seeks to work toward bipartisan solutions with the few remaining budget hawks still roaming the halls of Congress.