The Trump Administration has announced that, in fiscal year 2018, the federal budget deficit was a staggering $779 billion. That’s a 17 percent increase over fiscal year 2017, and the largest budget deficit in six years.
In short, we’re running enormous, historically disproportionate budget deficits — even though the economy is humming, jobs are being created, unemployment has reached the lowest levels in years, and the federal government is collecting record amounts of income tax revenue. At a time when we should be balancing our budget, or even running a surplus, we’re farther underwater than ever.
Nobody seems to really care about this — except a handful of old deficit hawks like me. The Republicans who used to claim to be the party of fiscal discipline cut tax rates, but they just haven’t gotten around to making the necessary cuts to federal spending that are needed to bring the budget into balance. No surprise there — cutting taxes and raising defense spending is the easy, champagne-cork-popping part of their agenda; actually digging into the details and deciding which federal programs to cut, and by how much, is the harder, painful part that every Republican running for reelection will happily defer. And the Democrats, who have never cared too much about balanced budgets anyway, are too busy reacting with outrage to everything President Trump does or says to focus on the deficit.
Some people argue that times are good right now, so what’s the big deal? Maybe the deficit really doesn’t make that much of a difference, they suggest. But if the U.S. government can’t live within its means when the economy is strong and record tax revenues are rolling in to the federal treasury, what is the deficit going to look like when the economy turns sour, payrolls get cut, and tax revenues fall? Just how big is this deficit going to get, anyway?
It all seems pretty ironic to me. President Trump boasts of being tough with foreign governments on trade and international relations, and putting America’s interests first in all things — but the need to sell bonds to finance the growing deficit does exactly the opposite. The Chinese, the Saudis, and everybody else who is buying the U.S. bonds we are selling are thereby acquiring enormous leverage, and if they start demanding higher interest payments before they make their purchases we’re in a world of hurt.
So pay no attention, folks! It’s all boring numbers, anyway! Let’s forget about the serious, long-term aspects of running a government, and go back to talking about the latest outrages that will dominate the news cycle for a day or two until some new and exciting outrage comes along.