$31 Trillion and Counting

 

The 2022 U.S. Midterm elections are now largely over. Over my entire adult life, I have always been a huge consumer of business and political news and this fall was no exception. I read news accounts and stump speeches and especially viewed much of the advertising in most states and congressional districts via You Tube.

 

Most of the issues raised by candidates of all stripes were valid and included inflation, general economic conditions, crime, reproductive rights, climate change and threats to democracy. To me, there was one glaring omission---the growing national debt.

 

As I write, the national debt is at $31 trillion dollars. Remember, a trillion is a thousand billion. In recent years, I have tried to bring up the looming problems that this will cause and 95% of the people to whom I speak do not care. A few have told me something along these lines—“Why should you care? At your age, you will be dead before it really hits.” Maybe so.

 

It appears that I am one of the few deficit hawks left in America. It does not matter whether a Democrat or Republican is in office; the debt continues to spiral. The media does a rotten job of coverage of this issue. Some will say look how the deficit had gone down this year. The deficit did not go down-- it increased! What they are saying is that the increase in the deficit is lower than it was the previous year. Also, with interest rates popping from virtually zero to about 4%, the debt service will go up dramatically as much of our borrowing is short term.

 

Let me be clear. I am not one of those who argues why can’t the Federal government manage their money as families do sitting around the kitchen table. Governments have the power to tax and print money that citizens do not. At times, governments need to deficit spend. Yet, sooner or later, the Federal government’s credit card will hit its limit and they will not be able to make interest payments. It may be due to a long economic downturn, a dollar crisis, or international tensions where foreigners cease to buy our long-term debt. Indeed, it could be many years away but it seems that virtually almost everyone in government is content to “kick the can down the road”.

 

Recently, I found an ally. Steve Rattner is a financier, a Democrat, and a frequent guest on Morning Joe on MSNBC. He and I do not share many political opinions but I love the data based charts that he often presents on air. In a guest editorial in the November 4^th, 2022 NEW YORK TIMES he wrote a wonderful piece entitled “The Huge Problem That Nobody Cares About.”

https://www.nytimes.com/2022/11/04/opinion/national-debt-spending.html

 

Rattner reported that the Congressional Budget Office projects that the debt will jump to $45 trillion in a decade.

 

The article concludes with “But a nation in which debt is growing faster than the economy will eventually be brought to its knees.” Well said, sir.

 

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com or leave a message on the blog.