Our Ever-Ignored Deficit

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.

Where’s A Budget-Cutter To Turn?

Congress has passed, and President Trump has signed, a $1.3 trillion interim federal spending bill.

That’s $1.3 trillion, with a “t.”  And that’s interim, in that the colossal amount of spending will only fund our out-of-control federal government until September 30, when another spending bill will be needed.

President Trump, who briefly raised the threat of a veto before putting his John Hancock on the bill, says he’ll never sign another bill like this one.  I’m calling BS on that one.  The reality is that, for people like me who think our country has an enormous spending problem that eventually will be our downfall, there’s nowhere to turn.  The Democrats never met a domestic spending program that they didn’t want to increase.  The Republicans, who posture about deficit responsibility, have shown that they are too craven, and too interested in avoiding ruffling any feathers that might interfere with their reelection prospects, to tackle the tough job of actually reducing, and in some instances eliminating, federal programs that really aren’t necessary.  And President Trump is a deal-maker who will gladly rationalize just about anything, just as he did with this latest monstrosity by saying that the increase in military spending makes all of the rest of the irresponsibility palatable.

There are no longer any institutional forces that will restrain federal spending or cause our political class to act like statesmen and take the long-term, good-for-the-country view.  There’s no appetite whatsoever for careful judgment, for systematic review of whether programs are actually working, and for making the thoughtful choices that are a crucial part of living within your means.  Once again, we’re seeing concrete evidence that the current class of political leaders are the worst political leaders in history.

We’re on the cash-paved road to failure, and spending ourselves into oblivion, and nobody seems to really care about doing anything about it.

The Ever-Upward Irresponsible Trend

Am I missing something?  Nobody seems to be paying any attention to federal spending and deficits anymore.

The Republicans, who used to be the preachers of deficit reduction, balanced budgets, and fiscal discipline, are much too busy trying to distance themselves from President Trump to do much of anything about anything, much less something detail-oriented and difficult, like tackling federal spending.  And the Democrats never seemed to have much appetite for actually considering whether legacy federal programs make sense in the current world, or are performing as they were intended, or are actually having a positive impact from a cost-benefit standpoint.  Expecting Congress to actually pass a budget seems to be hopelessly passe, and continuing to spend more, more, more seems to be the default approach.  And, given the kinds of deficits we’re racking up, and the experience of Puerto Rico, and Illinois, and other states that haven’t paid attention to basic economic realities, “default” seems like an apt word.

In case you’re interested, June 2017 was the first month in history where the American federal government spent more than $400 billion.  You can see the number — $428.8 billion — on page 2, in the “outlays” column, of this dry document called the monthly report of revenues and outlays, issued by the Treasury Department.   And here’s an interesting statistic, for comparison’s sake:  according to this report from the Congressional Budget Office, the amount of federal government outlays for the entire year of 1976 did not even reach $400 billion.  But ever since that time, it’s been an ever upward trend, and now we’ve reach the point where the federal government spends more in a single month than it spent in an entire year only 40 years ago.

You’d think that somewhere, someone in Congress would be up in arms about what is obviously an alarming and unsustainable trend.  You’d think someone, somewhere would be waving that dry Treasury report around and asking why the spending by the list of the government agencies set forth in small type later in the report needs to be ever increasing, and demanding that those agencies tighten their belts or justify their existence.  You’d think that someone, somewhere, would be glancing uneasily at Puerto Rico and Illinois, looking at the federal trends, and deciding that we need to do something to curb our profligate ways before we’re irretrievably on the road to economic perdition and financial ruin.

Of course, you’d be wrong on that.  It’s much easier to just react to the latest Trump Administration dust-up and let things slide.  The only worrying seems to be done by those of us out in the real world whose practical experiences with household budgets and controlling family spending makes us grind our teeth at the amazing irresponsibility of our elected representatives.

A federal government that spends more than $400 billion in a single month!  And nobody is talking about it.

Guns, Guns, Guns . . . And Distraction

Your daily newspaper and your favorite news websites have been dominated recently by news about guns and gun control.  Since the awful shootings at the Sandy Hook elementary school, where a heavily armed lunatic murdered more than two dozen children and adults, our political leaders have been talking a lot about firearms and what we can do to prevent another horrible massacre.

In an odd way, the opportunity to talk about guns must be a kind of welcome relief for our politicians, because the gun control debate lets each party retreat to safe, time-honored positions that appeal to their bases.  Democrats understand that most of their voters will support attempts to license gun owners, register all weapons, and restrict or even ban ownership of “assault weapons” or other firearms.  Republicans, on the other hand, know that their supporters will cheer vigorous defenses of the Second Amendment right to keep and bear arms and stalwart opposition to overly zealous attempts to regulate gun ownership.

I suspect that all of the talk, talk, talk about guns is, in part, a means of distracting voters from other pressing issues.  Members of Congress and the Obama Administration would rather stay snugly in their gun debate comfort zones than deal with the spending, tax, and budget deficit issues that have far more long-term significance for our country.  With all the talk about guns, how much discussion of those core economic issues have you heard recently?  When those issues are in the forefront, and feet are being held to the fire, there are no easy, pat answers and no rote appeals to political bases.

As terrible as the Sandy Hook shootings were, we shouldn’t let our political leaders divert our attention from the federal debt time bomb and other issues that are restraining our economy.  Yesterday we received an unpleasant reminder of these problems when it was announced that gross domestic product dropped in the fourth quarter of last year.  Imagine:  our economy actually shrank during the hottest shopping season of the year.  It’s time we remind Congress and the President of the paramount need to focus on the hard budget and economic issues, before our economy plunges into another recession.

Congratulations, Mr. President, And Good Luck

President Obama was re-elected last night, narrowly beating Mitt Romney.  I congratulate the President on his victory and wish him success.  In my experience, a successful President usually means we have a successful America.

Democrats kept control of the U.S. Senate, while Republicans kept control of the House of Representatives.  In short, the United States is in for more divided government.  After two consecutive “wave” elections, the message of this election seems to be to maintain the status quo.

Divided government is not necessarily a bad thing.  The Constitution, with its complex system of checks and balances, contemplates divided government, where one man or the passions expressed in one election can’t fully control the direction of the nation.  Our system — wisely, I think — contemplates compromise and collaboration to accomplish legislative goals.  Our problem lately is that we haven’t had meaningful compromise, or perhaps even meaningful attempts at compromise, from the President or the two Houses of Congress.  Perhaps that unwillingness to compromise was due to the rapidly shifting views of the electorate and the looming presence of the 2012 election, but with that election now one day behind us that rationale no longer exists.

With more divided government a reality, President Obama and the congressional leaders of both parties need to figure out how to compromise, because only through compromise will we be able to address the huge problems confronting our nation.  We all know what those problems are:  the “fiscal cliff” of self-imposed cuts and tax increases that will take effect in less than two months, trillion-dollar deficits that extend into the foreseeable future, adding to a dangerous amount of national debt, and entitlement programs that are on the road to bankruptcy unless reforms are instituted.  All of these issues, and others, have reached the point of criticality.

We can no longer afford drift and inaction in the face of these challenges.  It is time for President Obama and Congress to grapple with these issues and to reach the kinds of rational compromises that people of good will, but different political viewpoints, can find acceptable.  It will be a big task that requires leadership, bipartisanship, and a recognition that the needs of the country must take priority over momentary political advantage.

When I left our house at 5 a.m. today for the morning walk with Penny and Kasey, I noticed that some of our neighbors of both parties who had put candidate signs in their yards had removed them already.  They recognize that the election is over and it is time to move on with our lives.  We need some of that same attitude at both ends of Pennsylvanian Avenue.

Proposing A “Secretary Of Business” Is The Last Straw

President Obama wants to be seen as friendly to business.  He’s recently touted the idea of creating a “Secretary of Business” — a new, Cabinet-level position that would “consolidate” different federal agencies that deal with business and trade issues and create “one-stop shopping” for regulatory oversight.

This one proposal, I think, reflects President Obama’s deeply held view of the world — and why I must conclude, regrettably, that he will never truly grapple with our soaring budget deficits and federal debt, which I believe are the two most crucial problems facing our country.

In the President’s view, if business is struggling, we need to create a new government position to address the problem and shuffle existing agencies in a bureaucratic reorganization to try to “streamline” regulations.  His reflexive solution to all issues is new government positions, new government agencies, and new government initiatives.  If he needs to burnish his credentials with the business world, he thinks the proper response to to create a new government regime that shows that he cares.

President Obama has been our President for four years.  He’s seen our economy flounder, witnessed the loss of huge numbers of jobs and the departure of millions of disappointed job-seekers from the job market, watched our deficit and debt skyrocket, and heard complaints about excessive regulatory burdens, crony capitalism, and taxes stifling business investment and growth.  The fact that he nevertheless believes that he would aid business by creating a “Secretary of Business” who would help businessmen navigate through the thicket of federal regulations, and assist companies as they seek federal loans and grants and other assistance, speaks volumes about his fundamental mindset.  He’s not going to change if he’s elected to a second term.

If, like me, you believe that we need to eliminate Cabinet-level positions and federal agencies, not create them, if you believe that we need to reduce federal regulations, not hire new federal employees to assist overwhelmed businessmen in dealing with those regulations, if you believe that we need to cut spending, not maximize opportunities for people to get more federal loans and aid, how can you vote to re-elect President Obama?

Butt Belts And Budgets

Our political leaders’ approach to our budget woes reminds me of a curious device that we found in my grandmother’s basement, long ago.

We called it the butt belt.  It was a machine linked to a canvas belt.  You stood on a platform, slipped the belt around your keister or waist, and turned on the motor.  The belt vibrated and you leaned back, letting the contraption shake your rump like crazy.

The marvelous concept was that you could just stand there, let the machine do all the work, and the mechanical jiggling of your flesh would make the pounds and cellulite melt away.  Heck, you could even eat a sandwich back there, while the machine whaled away.  And after you were done shrinking your ample butt, you just turned around and let the magic belt cause that stubborn belly flab to vanish.  A few sessions with the butt belt, and you’d be ready to slip into that new bathing suit!

Of course, the machine really didn’t work, which is why we never found Gramma down there, getting shaken all over.  We now know that if you’ve overindulged, lost any sense of dietary discipline, and let yourself go, getting back into reasonable shape is going to require some really hard work on your part.  You’ll have to get some exercise and sweat, reduce your caloric intake, and change your habits to stop the constant snacking if you really want to make progress.

Hey, President Obama and members of Congress!  Standing immobile and hoping that the butt belt machine will magically turn your blubber into muscle won’t do the trick!

Eight Months, And $844,500,000,000 More In The Hole

The Treasury Department has announced that our federal government, in May, racked up a deficit of $124,600,000,000 — $124.6 billion.  That brings the deficit for the first eight months of the October 1 to September 30 fiscal year to $844,500,000,000.  I use the full numbers because the long strings of zeroes better convey the colossal scale of the spending hole that we continue, relentlessly, to dig for ourselves and the Americans of future generations.

The Congressional Budget Office forecasts that this year’s deficit will be $1,170,000, 000,000 — $1.17 trillion.  That breathtakingly huge number comes on the heels of the $1,300,000,000,000 deficit in the last fiscal year.  Our deficits topped $1,000,000,000,000 during each of President Obama’s three years in office.

No rational person can believe such deficits are sustainable or that it is a good idea to go farther into hock without doing anything about it.  Yet that is precisely how our federal government has responded.  Where responsible people would be cutting non-essential programs, reducing payrolls and salaries, developing rational revenue policies, and taking the practical, meaningful steps necessary to bring revenue and spending into balance, our government does . . . nothing.

There’s plenty of blame to go around.  Congress has shirked its responsibility to pass honest budgets and specific spending bills, administrators have wasted tax dollars, and huge segments of the American public have an apparently insatiable appetite for federal benefits and perks.  But I have grown sick to death of President Obama’s constant attempts to dodge his share of the blame for the ignominious failure of the government that he — and he alone — heads.  Successful Presidents are able to lead and work within our political system to deal the issues of the day.  President Obama, in contrast, throws out unrealistic budgets that don’t even receive the votes of members of his own party in Congress and then blames his predecessor — the one who left office more than three years ago — for our mounting debt problems.  Meanwhile, the spending and deficit binge continues.  I don’t view President Obama’s approach as quality leadership.  In fact, I don’t view it as leadership at all — and if a President doesn’t lead, he has failed on the most fundamental part of his job.

Many of us have known people who appeared to live well beyond their means.  We wonder how it can continue, and then, inevitably, the crash comes and the entire house of cards collapses with awful results.  If you’ve seen that scenario, you can’t help but be uneasy about the direction in which our country is heading.  The many zeroes in those trillion-dollar deficit numbers are like the lead weights on the chains binding Marley’s ghost, dragging us slowly and inexorably downward to a fate we fear will be filled with terrible consequences.

Santorum And Satan

I’ve been hearing Rick Santorum ads over the past few days.  It’s clear that his focus — and the means by which he attempts to distinguish himself from his Republican rivals — is “social issues.” Even his economic plans are couched as a way of “helping families,” by which he clearly means traditional, married, husband-and-wife led families.

I don’t subscribe to Santorum’s ultra-traditional views of how life should be lived or families should be structured.  I’m also concerned by the overt nature of his religious beliefs.  I heard clips of a speech he gave some time ago in which he talked about “Satan” targeting and attacking the United States and its institutions, and it made me very uncomfortable.  When was the last time we had a presidential candidate talking openly about “Satan”?  If a random guy at the airport was talking about “Satan” in the way Santorum did in that speech, wouldn’t most of us give that guy a very wide berth?

Santorum is of course entitled to his views, but his emphasis on religion and issues like gay marriage and contraception are a problem for me.  I’m not quite a libertarian, because I do think there is a limited, appropriate role for government under certain circumstances, but I don’t think the government should be lecturing us or or directing us or judging us so long as we live lawfully.  I suspect that any government led by Santorum would be as intrusive and overreaching into our daily lives as the Obama Administration has been — just in a different way and with a different focus.

In my view, we don’t need a President who fancies himself a spiritual leader.  We need a President who will roll up his sleeves and deal effectively with our enormous, structural deficit and debt problems.  Achieving that goal requires someone who can bring people together, not someone whose forays into “social” issues — and ruminations about the latest nefarious activities of Old Scratch — push people apart and prevent us from achieving the consensus necessary to do the job.

The Race Rolls On, And The Big Issues Linger

The Republican presidential primaries, already seemingly endless, roll on.  With Newt Gingrich’s big win in South Carolina, the race is in disarray.  Gingrich is on the rise, Mitt Romney’s shield of inevitability has been dented, and Ron Paul and Rick Santorum are hanging on.

The focus now moves to Florida.  As has come to be the pattern, that means another debate tonight (No!!!!!!), lots more negative ads, and probably some new revelations before Florida goes to the polls on January 31.  We’ll hear lots of buzz words and scripted retorts and talking points, but what we probably won’t hear is much substantive talk about exactly how the remaining contenders are going to tackle the budget deficit.

You can argue about how we select a President in our country, and whether beginning with states like Iowa, New Hampshire, and South Carolina makes any sense.  The early primary voters never seem to share my perspective on the big issues of the day, but perhaps that is just a reminder that ours is a large and diverse land where people have many different views.  In Iowa, social issues always seem to take center stage.  In South Carolina, the votes for Gingrich seemed to be motivated, at least in part, by anger — anger at the news media, and anger at President Obama — and a desire to select a candidate who, the voters believe, will cut the President to ribbons in debates.

Social issues just aren’t on my radar screen, I’m not mad at the news media, and scoring debating points with glib jabs at the President isn’t important to me.  Instead, I just want to hear how specifics about the candidates will cut our spending, balance our budget, resolve our debt issues, and get our economy growing again.  Those are the issues that are most important to me and, I think, most important to our country.  Maybe — just maybe — some Floridians share that view.

Anticipating Supercommittee Failure

The news about the debt supercommittee — the Joint Select Committee on Deficit Reduction — is not good. According to the Washington Post, the supercommittee members have gone on the Sunday talk shows to effectively concede they won’t succeed and to begin to prepare for the impending failure.

We can expect that each side will blame the other.  Congress might not be able to make hard decisions, but they are peerless in shirking responsibility for failure.  Even more sad, yet predictable, Congress also is talking about deactivating the automatic spending cuts that were supposed to make a grand compromise more likely.  If they do that, of course, the entire supercommittee charade will be exposed as a silly sham that has done nothing except demonstrate that our leaders lack the discipline and the will to make tough choices — even when the grim example of countless debt-ridden Eurozone countries shows clearly what ultimately will happen if our constant deficit spending habits are not curbed.

We are seeing an amazing lack of leadership in Washington, D.C., from the President on down.  Hang on to your hats tomorrow; if the financial markets get the idea that the supercommittee will fail and that no cuts of any kind will be made, we may be in for a serious stock market meltdown.

Our Nora Desmond-Like Leaders

The Congressional Budget Office recently released its statistics on the federal budget for fiscal year 2011.  The results are staggering — and completely inconsistent with the notion that the federal government has engaged in any kind of belt-tightening.

According to the CBO, the federal government spent $3.6 trillion in fiscal year 2011, and racked up a budget deficit of $1.298 trillion.  Those numbers are titanic.  This is an instance where words are a poor substitute for zeros.  $3.6 trillion, written numerically, is $3,600,000,000,000.00.  Our deficit, for the 2011 fiscal year, was $1,298,000,000,000.00.  According to the CBO, in the last three years our federal government has incurred by far the three largest annual budget deficits during the entire time period since 1945.  Each of those three annual deficits exceeded $1,290,000,000,000.00.  In those three years, we’ve added $4,000,000,000,000.00 to our national debt.

Those are figures that should be read with a shrill, rising mental voice, to properly reflect how truly alarming they are.  But, no one in charge seems very alarmed.  Instead, we have Democrats who act like Republicans are forcing our federal government to accept the most draconian cuts imaginable, Republicans who act like they’ve been budgetary hardasses, and a President who is out on another bus tour, kissing babies and eating barbecue and arguing that we should spend even more than we do.

It’s as if they are in their own little fishbowl world, as divorced from reality as Nora Desmond in Sunset Boulevard.  Does any rational person think we can continue to borrow more than $1,000,000,000,000.00 a year, largely from foreign investors, without experiencing life-changing consequences to our country and our lifestyles?  If we don’t change course, soon we’ll find ourselves floating face down in the pool, like hapless screenwriter Joe Gillis.

Giving Taxpayers The Bird

The United States Department of Agriculture — the same entity that proved unable to answer the question a farmer posed to President Obama recently — is paying western farmers and ranchers millions of dollars to protect a bird that is not on the endangered species list because there are too many of them.

The bird is the sage grouse.  In the last two years, the USDA will have paid $112 million to farmers and ranchers in 11 western states to implement practices to preserve the bird’s habitat.  Yet, the sage grouse — which is found in Wyoming, Colorado, Montana, Idaho, South Dakota, North Dakota, Utah, Nevada, Washington, Oregon and California — is too numerous to be included on the endangered species list.  Indeed, 10 of the 11 states where the bird is found allow it to be hunted.

I’m all in favor of sensible environmental protection programs, but the key word is “sensible.”  With our current budget issues, paying millions of dollars to farmers and ranchers to try to preserve the habitats of birds that aren’t endangered is not a prudent use of federal funds — particularly when about 40 percent of every dollar spent on the program must be borrowed.  I recognize that $112 million is a mere drop in the federal budget, but we need to pay attention to every penny if we are going to bring our enormous budget problems under control.

Not Distracted By The Debt Ceiling Fan Dance

A week has gone by, the August 2 default deadline creeps ever nearer, and still the antic debt ceiling political dance continues. 

It’s like an old fan dance, where the flashing fans of the dancer seek to tantalize while hiding what lies beneath.  The Senate has contributed the ill-defined “Gang of Six” proposal.  The House Republicans passed “cut, cap, and balance.”  President Obama continues to insist on a “balanced approach.”  Everybody uses every opportunity to trumpet that everybody else is behaving abominably and making outrageous proposals.  And the latest report is that the President is sitting down with House Republicans to try to cut a deal. 

Is real progress being made?  Who knows?  Appallingly, everything is done behind closed doors, with no public input.  How can anyone be comfortable with politicians making deals in private on this huge issue?  And most of the purported “savings” and “cuts” and “revenue enhancements” seem to be vague, generic promises to delegate the task of making actual changes to the same congressional committees that have, for years, proven themselves unable to restrain spending, exercise prudence, and govern responsibly.

I’m not going to be distracted by the waving fans.  I want this embarrassing dance to produce some real changes to how things are done.

The Debt Limit Merry-Go-Round

The talks between Republicans and Democrats about raising our national debt limit are frustrating to follow.  It’s like a merry-go-round.  The people go round and round and there appears to be activity, but nothing ever goes anywhere.  All the while, the August 2 deadline — after which the United States will default, according to Treasury Secretary Timothy Geithner — looms ever closer.

House Republicans have passed a budget that was rejected by President Obama and Senate Democrats.  The Republicans say any increase in the debt limit must be matched by actual cuts in current and future spending and have insisted that tax increases cannot be part of any resolution.  Senate Democrats haven’t passed a budget in years, but have floated a proposal that has not been the subject of public hearing or debate.  President Obama has gone from proposing a budget at the start of the year that did nothing to reduce annual deficits, to proposing a budget framework that was so nebulous it could not even be scored by the Congressional Budget Office, to now taking the Republicans to task for not agreeing to compromise on tax increases.

Talks are occurring, behind closed doors, between the principals — a result that should cause good government advocates everywhere to shake their heads in dismay.  Republicans say President Obama stalked out of the talks last night; Democrats say the President left because he was rudely interrupted by House Majority Leader Eric Cantor.  Posturing is running rampant on all sides.

In the meantime, Moody’s has announced that it is placing the U.S. under review for a rating downgrade.  Imagine!  U.S. government bonds and notes, for years viewed as the safest possible investment, may lose that designation because our political leaders cannot reach an agreement.  Any rational person  understands that if any default or serious uncertainty occurs, the interest rate on future U.S. borrowing will increase as investors demand an increased return for the increased investment risk — as investors inevitably and understandably do — and that result will just make our debt burden that much heavier and the ability to bring the budget into balance that much more difficult.

It’s time for our leaders to put aside the politics and put the national interest first.  It appears that Republicans would agree to a short-term deal that would make cuts proposed by the President’s own Debt Commission and raise the debt ceiling by the same amount, to allow additional time for negotiations on a broader solution.  That is what the parties should do.  The President, having waited until the eleventh hour to engage, can’t reasonably insist on a long-term deal and risk a default as a result.  And while Democrats may complain, they have only themselves to blame — they could have raised the debt ceiling last year, when they controlled both Houses of Congress and the White House, but they failed to do so.

The bottom line is, we shouldn’t be playing chicken with our national credit or investor confidence in U.S. securities.