Even as they stake claim to the future, Kamala Harris and Donald Trump ignore the greatest threat to it: America’s enormous national debt.
The $35 trillion (yes, trillion) debt gets nary a mention because both Democrats and Republicans are responsible for running up the nation’s monster obligation.
Republican Donald Trump added more than $7 trillion to it during his White House years. Democrat President Joe Biden will contribute nearly that amount by the time his term expires in January.
Neither Vice President Kamala Harris, the Democrat nominee for president, nor Trump, the GOP nominee, dare open the Pandora’s box. Quite the opposite. Both propose to spend way beyond the current sham annual federal budget of some $4.5 trillion.
Like aspirational politicians before them, they expect to absorb the billions of added spending with economic growth to stimulate more revenue in quest of a surplus. Their ways to get there differ: Harris increases taxes on the wealthy and corporations; Trump continues his first-term tax cuts due to expire and imposes tariffs on imported products made cheaper abroad. Both plans face the barrier of an ideologically divided Congress.
Yet nothing is said about what the presidential candidates would do if the federal government spends more money than it takes in each year they are in office. That’s the point when the national debt continues its climb to an eventual doomsday.
Regrettably, it has been 25 years since annual federal revenue surpassed spending. And 1999, when it happened, turned out to be an anomaly. Treasury records show the federal budget has recorded an annual surplus only four times in the last half-century.
The Peter G. Peterson Foundation is a namesake nonprofit economic entity founded by the former Nixon administration commerce secretary to reduce the national debt. It reports a current $2 trillion gap between federal government revenue and spending.
Put bluntly, we are a nation relying on a giant credit card racking up interest payments so large ($1 trillion annually) a distressed government may not be able to pay them at some future point — much less reduce the underlying debt the interest represents.
Yet pollsters tell us the cost of groceries, gas and housing are the big worry among voters this election cycle. It is a reality that doesn’t account for the larger peril of the intractable national debt.
Insurmountable debt accumulates from government spending beyond its means over time and eventually falling into a deep, dark, inescapable hole. The consequence is economic chaos and potential insolvency. Other countries have experienced it. America is not immune.
Presidents and congresses don’t mind. They continue to avoid the tough choices needed to combat the repercussions of spending far more, year after year, than the federal government gets in revenue from taxes and other income.
The Peterson Foundation attributes the growing national debt to three drivers:
• Demographic trends: The aging baby boom generation is making the country older. An estimated 10,000 people will turn 65 every day through the next six years — and they will live longer than average. By 2030, the number of Americans older than 65 will climb to 71.2 million. This reality puts hard financial pressure on Social Security, Medicare and Medicaid — mandated programs making up a significant portion of the federal budget. They are also the third rail of electoral politics.
• Rising health care costs: In America, they are the most expensive in the world, spending twice as much as other advanced nations. The average is $12,555 per person for our nation of 330 million people. Health care costs are the fastest-growing elements of the federal budget, representing nearly one-fifth of the nation’s economy.
• Inadequate revenue: Simply put, the U.S. tax system does not generate enough money to pay for federal programs. Higher annual deficits evolve, worsening the national debt. Most politicians prefer to talk about cutting taxes instead of raising them to produce more revenue. Nor do they like to expand ways of financing mandated programs.
Voters of all stripes should demand candidates for president and Congress explain how they plan to address these three factors. Young people especially need to make their voices heard. They will be the first affected by the dangers of insolvency.
But don’t hold your breath on large public rallies for action. Voters find the complexities of government debt oh so boring. Even when they acknowledge it will impose a heavy burden on their grandchildren, great-grandchildren and beyond.
Making the point of passive concern at a recent Brookings Institution conference on government finances, Oxford University economist Michael McMahon had this droll remark: “If you give a normal person a choice between reading a Fed statement or watching a Fed press conference or watching cat videos on YouTube, they’re going to choose the cat videos almost every time.”
Stated another way, we the people are to blame for the galloping national debt and its certain consequences if allowed to go unchecked.