In a 1987 ad about drug abuse, a man holds up an egg and says, “This is your brain.” He cracks the egg and drops it into a hot pan which then sizzled and popped in hot grease. “This is your brain on drugs. Any questions?”
American fiscal and budget policy looks like it has been run by people whose brains were scrambled by LSD and hallucinogenic drugs during the ’60s as they followed the Grateful Dead concert circuit ― and never recovered.
What a long, strange trip it has been.
U.S. federal debt passed $31 trillion recently ― after passing $30 trillion a mere nine months ago.
That’s the good news. The Congressional Budget Office expects that federal debt held by the public will go up by well over $1 trillion for each of the next 10 years, expanding by an astronomical $2.253 trillion in FY 2032 alone. Federal debt held by the public is on track to be $40 trillion a decade from now.
Put another way, federal debt is expected to go up as much in gross dollar amounts annually as the entire U.S. economy is expected to expand until 2029. After that, federal debt will expand much faster than the whole U.S. economy in gross dollar terms ― if it is still functioning, that is.
In past decades, such unconscionable profligacy on the part of Congress and the president would have been unthinkable and politically dangerous. However, with another biennial congressional election upon us, barely a peep is heard from either party about how we are going to come together and work out a deal to arrest mountains more of debt accumulation.
It is not that hard to balance the federal budget. First and foremost, Congress has to clamp down on spending. Second, they have to clamp down on spending. Third, clamp down on spending. Forever.
Perhaps the budget hasn’t been balanced because we have not elected any real leaders in the past 20 years. Real leaders recognize the dangers of what lies ahead and shape public policy to head off problems before they become too enormous to handle.
By 1982, Social Security was headed for financial insolvency. By 1986, the U.S. tax code had become so jumbled up that it too had to be reformed and simplified, all of which took real political leadership.
In his book about James Baker, “The Man Who Ran Washington”, political reporter and author Peter Baker (no relation) accurately recounts the steps taken by real leaders such as President Ronald Reagan and House Speaker Tip O’Neill to solve these pressing national issues. First, Baker helped Reagan and O’Neill identify the problem at hand; second, explain why a solution had to be found; third, set priorities for both sides to achieve during negotiations; and then, fourth, communicate, cooperate and compromise to produce a workable solution that everyone can live with.
Notice how the goal was to produce a “workable solution everyone can live with.” President Reagan, while a man of deep political convictions, was also a pragmatist, which is why he hired James Baker to be his chief of staff and then his Treasury secretary. Reagan famously told Baker and congressional liaison staff, “I’d rather get 80% of what I want than go over the cliff with my flags flying,” which he did repeatedly during his two terms in office.
The Greenspan Commission was established in 1982 and Social Security was “saved” for the next 40 years ― although it is in severe need of another round of reformation. The Tax Reform Act of 1986 simplified the tax code for 4 million Americans ― it simply took them off income tax rolls completely. The tax code needs another round of simplification by taking everyone off income tax rolls and replacing it with a consumption tax ― but the leadership necessary to pull that off may be beyond human comprehension.
Neither one of those deals was “perfect.” “Perfection” in politics is the mortal enemy of the good-to-great results for our nation. Perfect adherence to political ideology means nothing gets done for the good of the nation.
The $31 trillion of national debt ― and still counting ― proves it.