We are a long way removed from 1953 when President Dwight D. Eisenhower said, “There must be balanced budgets before we are again on a safe and sound system in our economy.” We are even a long way removed from 2013 when Rep. Paul D. Ryan (R-Wis.) warned that debt “will weigh down our country like an anchor,” and from 2016 when Senate Majority Leader Mitch McConnell (R.-Ky.) said that “this level of national debt is dangerous and unacceptable.”
In 2009, with the country in the midst of its worst recession in decades (unemployment rate: 8.3 percent ), all but three Republicans in Congress voted against President Barack Obama’s much-needed $787 billion stimulus package. Now, with a healthy economy (unemployment rate: 4.1 percent), a majority of House and Senate Republicans voted for a $560 billion spending package. Republicans are turning economic logic on its head. Periods of economic expansion should be used to balance the budget. Then, when a downturn hits, that’s the time for stimulatory spending increases and tax cuts. Running stratospheric deficits now leaves us defenseless to fight a future recession.
A lot of the individual spending provisions in the budget deal are needed, especially the lifting of sequester caps on defense spending. But the cumulative result is dire, coming as it does less than two months after Republicans approved, on a party-line vote, a $1.5 trillion tax cut that is not needed and risks overheating the economy. The stock market is spooked, and for good reason. The Committee for a Responsible Federal Budget estimates that we will be running trillion-dollar deficits “indefinitely.” That’s roughly double the deficit in Obama’s last full year in office — $585 billion. Oh, and the Trump administration is about to unveil an infrastructure bill that is projected to cost the federal government $200 billion.
It’s hard to argue with Sen. Rand Paul (R.-Ky.), who during a lonely protest on the Senate floor said, “If you were against President Obama’s deficits, and now you’re for the Republican deficits, isn’t that the very definition of hypocrisy?” But of course he’s a hypocrite too, having voted for the massive tax cut.
Robert Rubin, the treasury secretary under President Bill Clinton when we last balanced the budget in the 1990s, tells me that projected debt levels “will highly likely lead to higher interest rates, crowding out of private investment,” and cause “reduced business confidence because of policy uncertainty, less resilience to economic or geopolitical crises, ever-reduced resources available for public investment and defense, and, at some point, serious financial market disruption.”
As a national security analyst, I am particularly concerned about the impact on defense. President Trump claims, “This Bill is a BIG VICTORY for our Military.” That may be true in the short run, but over the long haul this will prove to be a Pyrrhic victory.
Already, last year, net interest on the debt and mandatory spending programs — Social Security, Medicare, Medicaid, etc. — consumed 69 percent of the federal budget. The Peter G. Petersen Institute projected, even before this latest spending binge, that the figure would grow to 77 percent by 2027. That means that within a decade, only 23 percent of the federal budget will be left over to fund defense, scientific research, space exploration, disaster relief, infrastructure and all other “discretionary” spending. And all of that will have to be funded with borrowed money, reports the House Budget Committee, because by 2029 mandatory spending will consume the entirety of federal revenue. Good luck paying for defense with so little money to go around.
Forget the fantasy of 4 percent economic growth. The only way out is to either increase revenue or restrain entitlement spending. Ryan has made entitlement reform a centerpiece of his career, but there is no chance of Congress taking badly needed action, because Trump, the self-styled “king of debt,” couldn’t care less.
I’m starting to think that MAGA stands for Make America Greece Anon. Trump is leading Republicans to fiscal, intellectual and moral perdition. There is no longer a conservative party in this country. There is only a cult of Trump.
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