The current Administration likes to point out that the annual federal deficit has been reduced significantly (for now). Okay, that’s something, but it’s only part of the story. Don’t you also have to consider the starting point? You know, like your minimum credit card payment dropped by ten dollars, but you still owe $25,000.
On September 8, 2016 the public debt was $14,112,595,306,798.40 so in seven years and eight months the debt held by the public has more than doubled. I guess you can claim increasing that debt at a slower rate is a good thing, but the bad thing is … the debt is still growing and the next president will inherit a huge problem.
To bring that debt under control requires spending less than revenue. That simply means a robust economy that generates more tax revenue, less spending, higher tax rates or a combination of all three.
In July 2016 the Congressional Budget Office wrote:
If current laws governing taxes and spending did not change, the United States would face steadily increasing federal budget deficits and debt over the next 30 years, according to projections by CBO. Federal debt held by the public, which was equal to 39 percent of gross domestic product (GDP) at the end of fiscal year 2008, has already risen to 75 percent of GDP in the wake of a financial crisis and a recession. In CBO’s projections, that debt rises to 86 percent of GDP in 2026 and to 141 percent in 2046—exceeding the historical peak of 106 percent that occurred just after World War II. The prospect of such large debt poses substantial risks for the nation and presents policymakers with significant challenges.
Have you heard any serious discussion about this from the presidential candidates?
Rather you hear about more spending (including Trump) and the establishment of new liabilities through new entitlement programs such a “free” college or expanded Social Security, and even greater subsidies for Obamacare. You also hear either about cutting taxes or raising taxes; mostly on a select few Americans, but not to reduce the debt, but to spend and then create more debt.
If we had spent the last eight years laser focused on growing the economy and hence the tax base, maybe we wouldn’t be where we are today but we didn’t, so now what happens, more of the same?
We seem to be great at ignoring a problem, lying about it and waiting until a crisis hits and then seeking short-term fixes … just like Social Security.