Federal deficit projected to cross $1 trillion mark
New White House budget projections show the U.S. will add $1 trillion to the national debt this year, raising the total to an unprecedented $22 trillion; Rich Edson reports from Washington.
Another year, another massive, totally unsustainable national deficit.
As 2019 comes to a close, the federal government is running deficits that make the mostly fiscally irresponsible George W. Bush administration look like deficit hawks.
In the 2018-19 fiscal year, the federal government spent $984 billion more than it received in revenues, the highest deficit since 2012 when the economy was still in the midst of recovering from the 2008 economic crash. And there are no signs that the national government will soon come to its senses. Projections for 2020 show the national deficit will likely swell beyond $1 trillion.
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These figures should terrify you. A growing national debt means that an ever-greater proportion of the budget will need to be spent making debt interest payments instead of paying for essential services.
It also puts the U.S. economy at great risk, because higher debt-to-GDP ratios are often associated with slower long-term economic growth — take a look at Japan, for example.
Further, an out-of-control national debt could eventually cause high levels of inflation and even push foreign nations to create a new international reserve currency. Today, much of the world’s international business is conducted using U.S. dollars, because they have long been considered the world’s most stable currency. But if that changes — and a growing national debt will likely do just that — then it’s entirely possible the world will find or create a new currency to use, pushing trillions of dollars back into the United States, causing inflation and sending the economy into a Depression-like collapse.
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But despite the danger posed by the growing deficit, President Trump has largely received a pass from my fellow conservatives and libertarians, including many of the same people who screamed bloody murder throughout the Obama years — the worst period for the national debt in U.S. history.
To some extent, this is understandable. Trump didn’t create Medicaid, Medicare or the dozens of national welfare programs that are mostly responsible for increased government spending. And there’s no question that the Trump administration’s deregulatory efforts, pro-business policies, and the Trump-backed tax reform legislation passed in 2017 have helped to grow our economy, which is currently in a better position than it has been in decades.
Unemployment for women (3.2 percent) hasn’t been this low since the 1950s, and in 2019, unemployment for African Americans, Hispanics and Asians has been at its lowest point in recorded history, according to data from the Bureau of Labor Statistics.
America is headed for the fiscal cliff, and none of the people who are supposed to be concerned about debt seem to care.
These achievements are undeniably important, but so is the long-term fiscal health of the nation, a reality the Trump administration and most Republicans in Congress seem completely unwilling to admit.
America is headed for the fiscal cliff, and none of the people who are supposed to be concerned about debt seem to care.
Perhaps reasonable people could look the other way if Trump were actively trying to reduce the deficit but coming up short because of Congress’s unwillingness to enact responsible reforms. But the president has not done anything to suggest he’s interested in cutting the deficit. In fact, numerous media reports citing White House sources have said he has no interest in slashing spending, and Trump has backed huge increases in national defense and infrastructure spending.
Further, although I was and continue to be a big supporter of the 2017 tax reform, cutting taxes without decreasing spending is almost never good policy.
It’s true that some congressional Republicans — like Sens. Ted Cruz, of Texas, and Rand Paul, of Kentucky —have argued passionately in favor of cutting spending, but Republican congressional leadership has largely taken the opposite approach.
Senate Majority Leader Mitch McConnell even went so far as to brag about delivering nearly $1 billion in federal funds for his Kentucky constituents at a December press conference. The funds were inserted into two year-end omnibus spending bills at the request of McConnell and signed into law by Trump, who had previously promised he would never again sign such legislation.
Although spending an extra $1 billion won’t, in the grand scheme of things, have a large impact on the national debt, it sure as heck doesn’t help.
Of course, when it comes to the national debt, the only people who have been worse for the country over the past few years than the Republicans and Trump are the Democrats. Not only do they seem to have no problem at all with our reckless spending, but they’re also championing tens of trillions of dollars in new reckless spending.
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In just the past year alone, Alexandria Ocasio-Cortez, Bernie Sanders, Pete Buttigieg, Elizabeth Warren, Joe Biden and others have called for a slew of costly, often wildly destructive new government programs. If they have their way in 2020, the federal government will soon be spending more than $32 trillion on a single-payer health care system, trillions of dollars on a Green New Deal, tens of trillions more on a federal jobs guarantee, and untold trillions on “free” college tuition and college debt cancellation programs — and that’s just a small sampling of Democrats’ seemingly never-ending wish list.
Look, I get it: It’s not easy to balance budgets, especially in a world in which most of the media labels you a heartless Nazi monster every time someone suggests reforming Medicaid or creating work requirements for able-bodied adults without children.
But if President Trump and congressional Republicans don’t take the national debt seriously, Democrats have proven over the past several years that no one will, and our children and grandchildren will be much worse off for it.
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Does Trump deserve a pass for failing to reform out-of-control federal spending practices? No, but neither do the Republicans and Democrats in Congress.
When our fiscal reckoning inevitably comes — and that reckoning could take shape in many different forms — we should not only remember who created this mess, but also those who did nothing to fix it.