For social conversation, I occasionally pose the question of mankind’s greatest invention. Responses vary but often include the telephone, antibiotics, the computer, search engines and GPS.
In my book, the prize goes to Johannes Gutenberg and his printing press. For without it, government would be unable to literally print money, which ours is doing these days in incomprehensible volume.
Upon taking office, President Biden proposed and Congress obediently passed a stimulus package worth $1,900,000,000,000. For shorthand, we write $1.9 trillion. But that is what the number looks like with all the included zeroes. Anyone who dared suggest a slimmed-down number was shot down by the taunt that this was no time for small thinking or half measures. The slogan could have been, “$1.9 trillion or bust.”
That was on top of the Trump administration’s CARES Act a year ago at a nice, round $2 trillion. Which was then followed in December by a second relief bill at a mere $900 billion.
In the final 10 months of Trump’s presidency, the U.S. added $4.25 trillion to its debt load. Of course, this was a time of public health emergency and attendant economic crisis.
However, the troublesome bottom line is that government spending now far outpaces revenues in good times as well as bad. It is the case during peace and prosperity. It simply ramps up further during war or calamity.
21 years ago as we turned the page on a new century, our national indebtedness stood at roughly $5.6 trillion. Today, it exceeds $28 trillion and is headed north at a speedy, unrestrained clip.
Some will argue, of course, that our population has grown; our gross domestic product is far larger than at previous times; and so forth. All of which is true but does not mask the fact that deficit spending increases at a rate that far outpaces any other marker.
Speaking of ever-faster pace, Biden is now rolling out a $2.25 trillion “infrastructure” plan; reportedly soon to be followed by an only marginally smaller package of major expansions to health coverage, paid family and medical leave, the child tax benefit, and, and, and.
All told, these two proposals could total $4 trillion or more.
It is hard to argue with investment in infrastructure. This columnist, for one, was surprised that Trump never made it a centerpiece, even potentially a bipartisan one. “Infrastructure week” was always slated for next week, never to arrive.
This presumes, of course, that America is still capable of undertaking major projects, and building or rebuilding major things.
Critics, though certainly not moi, might question what $400 billion or thereabouts for elderly home care has to do with infrastructure. But when we are talking about multiple trillions, why quibble with small numbers?
The notable, quotable Illinois Senator Everett Dirksen once commented, “A billion here, a billion there, and pretty soon you’re talking real money.” How positively quaint that now sounds. With numbers that are relics from another era.
To Biden’s credit, he at least presents serious proposals for how to pay for significant portions of his latest plans. If not for the opening stimulus of $1.9 trillion. That is more than can be said for Trump-era Republicans who never evidenced any remote seriousness about the revenue side of the equation.
Having lost the White House and the Senate, Republicans have suddenly rediscovered their antagonism to runaway spending. But coming off the last four years, the public is wise to the charade. Even the GOP talking points on fiscal responsibility seem half-hearted and dripping with insincerity.
Perhaps I am just a killjoy from yesteryear with outdated notions about paying one’s bills. There is little constituency these days for austerity.
Ronald Reagan’s famous quote, “Government is not the solution to our problem; government is the problem,” is relegated to the history books. Same for Bill Clinton’s, “The era of big government is over.”
In this moment, Biden is being urged from many corners to go big and then go bigger. There is much chatter about the potential for his to be a “transformational” presidency in the vein of FDR or LBJ, not some timid, namby-pamby affair as plenty of Democrats now regard the Clinton and Obama years.
Given the action-reaction-counterreaction nature of our politics, the explanation for Biden’s bold ambitions again traces back to Trump. Just as Obama engendered a Republican shift to the right, Trump had the effect of pushing Democrats in their outrage to the left. Biden has always been a finely-tuned barometer of his party. He has moved left because his party has moved markedly that way.
Since Trump and his Republican enablers felt little need to pump the fiscal brakes, Democrats see no reason that burden should fall to them. Moreover, while income inequality has been growing for years to scary, unjust levels, Trump was seen to throw fuel on that fire. Redress is necessary even if Democratic attempts to do so through both taxes and spending likely will fail to dramatically reshape the curve.
The predicate for all of this government growth under both parties is that interest rates are minuscule and borrowing is cheap. A rather new concept that goes under the heading of Modern Monetary Theory holds that deficits no longer matter and such concern is passé. Some economists contend that mechanisms are now in place to permanently whip inflation. What conceit.
Even with inflation around two percent and interest rates barely above sea level, annual debt service sucks up a substantial chunk of every tax dollar. What happens if inflation gains velocity? If it approaches five percent? Or, God forbid, 10 percent? Theories around free or cheap money are great until suddenly they are not.
Responsible parents wait until their children are young adults before handing them a credit card. Even then, it usually bears a low credit limit. Yet, as an aging country, we are effectively giving each child a credit card preloaded with a huge and growing debt that will someday come due. Here’s to you, Junior.