One trillion dollars ($1,000,000,000,000.00). That’s how much our government borrowed last year to keep up with its bills: In other words, we paid out one trillion dollars more in expenses than we collected in taxes.
No wonder the economy looks good. Any economy could appear prosperous with a trillion dollars of borrowed money.
Not only that, but President Trump’s proposed budget this year is also at least one trillion dollars short. If he has his way, we’ll go in debt at least a trillion dollars per year for the next decade. And our irresponsible Congress will go along with the economic illiterate in the White House because the nation’s feel-good economy is based partly on the misleading impact of borrowed money.
None of this matters to Trump. He lives his life on borrowed money. He claims to be a billionaire, but we don’t know whether he owns a billion or owes a billion. He refuses to share his financial information or his tax records.
We do know from court records that he declared bankruptcy more than once — one way to get rid of debt — and that he defaulted on several large loans — another way to shed debt.
Unlike Trump, the nation cannot deal with debt by declaring bankruptcy or defaulting on loans. Either strategy would destroy our economy as well as the world’s economy. In addition, we pay interest on our national debt. Today, debt interest amounts to more than $300 billion a year – $300 billion dollars of welfare for wealthy nations and wealthy individuals.
We have not had a balanced budget since those ancient days when Bill Clinton was president. And our cowardly Congress has relied on a childish budget avoidance routine called “continuing resolutions” since long before Clinton’s time.
Learned economists say we can afford debt. No doubt that’s true. Otherwise, the nation would be in serious economic decline. The question is whether our children and grandchildren will be able to afford the debt/interest load we inflict on them, especially when inevitable economic downturns come along.
Undoubtedly, our grandchildren will also be victims of the inflation we traditionally use to help pay off national debts. (Bread that was 25 cents a loaf in my youth is now $3 or $4 a loaf, and my great-grandchildren will pay $10 a loaf. Raising minimum wages won’t help much under that scenario.)
Economists also talk about “opportunity costs.” That means if we spend precious tax dollars on debt interest, we do not have the opportunity to spend that interest money on education, infrastructure, Social Security, carbon waste reduction, renewable energy, health care or other much-needed efforts to modernize the economy. As long as we accept deficit financing, those opportunities are lost forever.
Republicans once believed in balancing the budget, but Ronald Reagan changed that philosophy. His handlers convinced him that borrowing money was the best way to force reductions in the size of government. That idea is nonsense, just like Reagan’s “trickle-down economics” and his statement that “government can’t solve our problems; government is the problem.” (George H.W. Bush labeled Reagan’s economic policies correctly: “Voodoo economics.”)
And now we have a president whose economic policy is not only voodoo but simple-minded hokum.
We cannot build a strong economy and pay down trillion-dollar deficits on empty promises, lower taxes, and showbiz. Getting back to responsible money management will require wisdom, leadership and tax revenues sufficient to at least pay our bills.
Don Gale, a longtime Utah journalist, remembers when presidents and Congress cared about the nation’s fiscal integrity.