This is hardly a courtroom, but let’s begin with a stipulation.
Namely, all reasonable people can affirm that a country must pay its bills. No different than is the case with any responsible individual, obligations incurred need to be paid. A nation cannot simply walk away from its debt; least of all, the United States of America.
In that sense, the deadline-looming battle royale over increasing the debt limit is reckless theater. This is not an argument about the authorization of new programs and expenditures. Instead, we are witnessing political playhouse around the essentially silly question of whether the Treasury Department can continue to pay the bills for expenses already okayed by our elected officials.
That should be a no-brainer. Which probably explains why the likes of Lauren Boebert and Marjorie Taylor Greene struggle mightily with the concept, opting instead for the easy dramatics.
We have been treated to this play plenty of times over a number of years. We were here in early 2021 with a resolution being reached just one day before an initial default. Prior to that, a similar drama unfolded in the summer of 2019, though that was settled well before the gun was set to go off as then-President Donald Trump chose not to unnerve the financial markets heading into his reelection year.
In fact, over just the last 13 years since 2010, this is the 11th time Congress has faced such a debt-limit deadline.
Yet, this one feels different due to the ever-increasing dysfunction of our political system and the inability of key parties to do much of anything in reasonableness and good faith. A particular complication is the ultra-thin GOP majority in the House and the dominance of Trump-inspired hard-liners. Speaker Kevin McCarthy is constantly, anxiously looking over his shoulder without much negotiating room or latitude.
While there is abundant talk of default and catastrophe, the smart bet is still that calmer heads, to the extent they are to be found, will work this out at the final hour. As has often been the case, the voting majority is likely to be provided by a slew of Democrats joined by a sufficient handful of centrist Republicans still invested in the task of governing.
But as long as we are dealing with stipulations, let’s enter a second one. Specifically, that while bills need to be paid, our country is accruing debt at staggering, unsustainable levels.
Otherwise put, this debt limit fight is a silly battle, but the discussion of our escalating debt is deadly serious and imperative.
This year alone, America is projected to spend $640 billion on debt service. That is for interest only. For those who like their numbers in fuller form, it reads $640,000,000,000.
Worse, that annual interest payment is expected to more than double in just the coming decade. The nation’s finances are on a glide path toward a very unattractive destination.
At the turn of the century, the federal debt stood at $5 trillion, still an imposing number. By 2012, it exceeded $15 trillion. Ten years later, at the close of 2022, it had more than doubled to $31.5 trillion.
The Trump years saw that number grow by $7.8 trillion, acknowledging that a good chunk of that related to Covid response. Biden’s presidency has added another $3.7 trillion.
The bottom line is that neither party is remotely serious about fiscal responsibility. The federal budget was last in balance during one year of Bill Clinton’s administration. Though these days, Democrats are enamored with the deficit-denying “modern monetary theory.”
On the other side of the aisle, Republicans give lip service to fiscal issues when they are out of power, though not so much when they are in charge of the budgetary reins.
Moreover, as Trump has changed the core GOP constituency to be a small-town, blue-collar one, entitlement spending on Social Security, Medicare and Medicaid have been removed from the table of what can even be discussed.
For all the talk in rarified circles about the need for fiscal conservatism combined with social tolerance, the Trump base is the exact opposite – socially conservative but fiscally liberal.
Add that to the prevailing approach on the Democratic side and you get a country far more divided over contentious social issues than over financial matters.
My friend and mentor, former Governor Dick Lamm, a deficit hawk for sure, years ago commented, “America has one party addicted to government and the other addicted to tax cuts.” Too true, even as Republicans more lately have tacitly joined the big government cheering squad.
The hard truth is that the faction out there truly concerned with fiscal matters is small and receding. Which is why this column and a thousand others in a similar vein will slide quietly into the abyss.
When I have previously written on the subject, a good deal of feedback has followed with the argument that deficits matter not as a number, but only as a percentage of GDP.
If that is the case, consider that over the last 50 years, the annual federal deficit has averaged 3.5 percent of GDP. The Congressional Budget Office forecasts that number to increase to 6.1 percent over the next decade.
In a low-interest context, the case can be made that printing money is a rather inconsequential way of indulging our appetite for more government than revenues dictate. However, anyone who carries credit card debt or has recently applied for a mortgage or buys U.S. Treasuries knows that those days are over and not soon returning.
With interest rates on the incline, debt financing grows ever more expensive and soaks up even more public dollars. It is a nasty habit. Maybe government checks and grants should come with something akin to the Surgeon General’s warning label.
By the time this column appears, perhaps there will have been some meeting of the minds with the debt ceiling extended for an additional period.
That is not optional. But incumbent on leaders of both parties is a serious commitment to incur fewer bills over the long haul or realign revenues to match expenditures.
Excuse me if I am not exactly holding my breath.
Eric Sondermann is a Colorado-based independent political commentator. He writes regularly for Colorado Politics and the Gazette newspapers. Reach him at [email protected]; follow him at @EricSondermann
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