Oh Lord, give me chastity,” St. Augustine is reputed to have said. “But don’t give it yet.” So it is with Republicans who have vowed to show some fiscal discipline — sometime during President Trump’s second term.
But while we are waiting, the Congressional Budget Office has announced that this year’s budget deficit will top $960 billion, $63 billion more than predicted in May of this year. And next year’s deficit will almost certainly exceed it. After that, the era of trillion-dollar deficits is here to stay. By 2029, CBO reports our $22 trillion national debt will top around $34 trillion.
President Trump may accomplish the truly Herculean feat of becoming a bigger deficit spender than President Obama. And he’ll do it without a catastrophic recession to deal with.
How did we get here? Contrary to conventional wisdom, it wasn’t the Republican tax cut. In fact, when compared to 2018, tax revenues went up 3 percent in the first nine months of fiscal year 2019. Would they be even higher in the absence of those cuts? Maybe. But the real problem, as usual, is out-of-control spending.
The CBO estimates that federal outlays in 2019 will total $4.4 trillion, a $300 billion increase in nominal spending since 2018. Discretionary spending is up. Defense spending is up. Entitlement spending is up. There is no effort to prioritize or make the difficult choices of governing, there is only . . . more.
While I realize that Congress controls the purse strings, it is also true that President Trump has shown exactly zero interest in restraining spending. The only time he speaks out on budget matters is to demand more money for his latest pet project.
As bad as this is, we can hardly look to the Democrats for relief. Their spending plans would make Caligula look like Scrooge McDuck. Consider that with the release of his $16.3 trillion green-energy plan, Bernie Sanders has now promised more than $58 trillion in additional spending over the next ten years.
Ok, you say, but Bernie is an avowed socialist, so we should expect as much. What then about Elizabeth Warren, who “has a plan for that,” proposing an estimated $40 trillion in new spending over the next decade. Or Kamala Harris, who would spend an additional $43 trillion over ten years. And Pete Buttigieg wants to spend an additional $6.9 trillion. Even supposed moderate Joe Biden has called for around $2.97 trillion in spending so far.
Worse, the Iowa caucuses are still six months away. The giant pander-fest that is the Democratic primary is just getting started. The race is on to see which candidate can be the first to promise more than $100 trillion in spending the government can’t afford.
One wonders how all those young people complaining about their student debt would react if they understood that their theoretical share of the national debt was about $67,000.
The growing debt does not come without consequences. There are, of course, economic repercussions. Over time, debt can slow growth, reduce wages, and hinder our flexibility in responding to economic slowdowns.
More important, there is a moral dimension as well. Every child born today inherits a portion of that debt. We are living at our children’s expense. You can’t get much more “taxation without representation” than that.
If only someone in Washington cared.