Tag Archives: National Debt

Can America Do It All? by Patrick J. Buchanan

The short answer is no. From Patrick J. Buchanan at buchanan.org:

In fiscal year 2020, which ended on Sept. 30, the U.S. government set some impressive new records.

The deficit came in at $3.1 trillion, twice the previous record of $1.4 trillion in 2009, which was set during the Great Recession, and three times the 2019 deficit of about $1 trillion.

Federal spending hit $6.5 trillion, one-third of U.S. gross domestic product, a share unrivaled except for the later years of World War II when federal spending exceeded 40% of GDP.

The U.S. national debt, $14 trillion when Donald Trump took office, now stands at $21 trillion, roughly the same size as U.S. GDP.

In fiscal year 2021, the deficit could be of the same magnitude as 2020.

Why so? First, the economy is not fully recovered from the 2020 depression. Unemployment is still near 8%. Nancy Pelosi has already proposed $2.2 trillion in new spending to battle the effects of the coronavirus pandemic in the first month of this fiscal year. And COVID-19 cases are spiking again.

With the national debt already equal to the GDP, and growing faster now, a question arises: Where does this end?

Continue reading

Debt is the Real Pandemic, by Ron Paul

Long after coronavirus is but a memory, our children and grandchildren will be paying for it. From Ron Paul at ronpaulinstitute.org:

According to the Congressional Budget Office’s (CBO) latest “Update on the Budget Outlook,” this year’s $3.3 trillion federal deficit is not just three times larger than last year: it is the largest federal deficit in history. The CBO update also predicts that the federal debt will equal 104 percent of the gross domestic product (GDP) next year and will reach 108 percent of GDP by 2030.

The CBO update also shows that the Social Security, Medicare, and highway trust funds will all be bankrupt by 2031. This will put pressure on Congress to bail out the trust funds thus further increasing the debt.

This year’s spike in federal spending was caused by the multi-trillion dollar coronavirus relief/economic stimulus bills passed by Congress and signed by the president. However, spending had already increased by $937 billion from the time President Trump was sworn in until the lockdown.

Federal spending is unlikely to be reduced no matter who wins the presidential election. Former Vice President Joe Biden has proposed increasing spending on everything from Obamacare to militarism to “green” cronyism. Yet some progressives are attacking Biden for being to “stingy” in his spending proposals. Even more distressing is how few progressives are critical of Biden’s support for increasing the military budget.

With some notable exceptions, such as his infrastructure plan, President Trump is not proposing any massive new spending programs. However, he Is not promising to stop increasing, much less cut, federal spending.

Continue reading

Since 9/11, the Government’s Answer to Every Problem Has Been More Government, by John Whitehead

It’s a cycle: problem→government→government makes problem worse→more government→and so on. From John Whitehead at rutherford.org:

“A government big enough to give you everything you want is a government big enough to take away everything that you have.”—Anonymous

Have you noticed that the government’s answer to every problem is more government—at taxpayer expense—and less individual liberty?

The Great Depression. The World Wars. The 9/11 terror attacks. The COVID-19 pandemic.

Every crisis—manufactured or otherwise—since the nation’s early beginnings has become a make-work opportunity for the government to expand its reach and its power at taxpayer expense while limiting our freedoms at every turn.

Indeed, the history of the United States is a testament to the old adage that liberty decreases as government (and government bureaucracy) grows. To put it another way, as government expands, liberty contracts.

To the police state, this COVID-19 pandemic has been a huge boon, like winning the biggest jackpot in the lottery. Certainly, it will prove to be a windfall for those who profit from government expenditures and expansions.

Given the rate at which the government has been devising new ways to spend our money and establish itself as the “solution” to all of our worldly problems, this current crisis will most likely end up ushering in the largest expansion of government power since the 9/11 terrorist attacks.

This is how the emergency state operates, after all.

From 9/11 to COVID-19, “we the people” have acted the part of the helpless, gullible victims desperately in need of the government to save us from whatever danger threatens. In turn, the government has been all too accommodating and eager while also expanding its power and authority in the so-called name of national security.

As chief correspondent Dan Balz asks for The Washington Post, “Government is everywhere now. Where does it go next?

When it comes to the power players that call the shots, there is no end to their voracious appetite for more: more money, more power, more control.

This expansion of government power is also increasing our federal debt in unprecedented leaps and bounds. Yet the government isn’t just borrowing outrageous amounts of money to keep the country afloat. It’s also borrowing indecent sums to pay for programs it can’t afford.

Continue reading

Sen. Rand Paul blasts GOP colleagues, says they should ‘apologize’ to Obama for past spending complaints, by Victor Garcia

Rand Paul speaks some all too rare sanity in Washington. From Victor Garcia at foxnews.com:

Congressional Republicans should apologize to former President Barack Obama “for complaining that he was spending and borrowing too much,” Sen. Rand Paul, R-Ky., told “Your World” Wednesday.

“It’s funny that people say, ‘Well, Washington Republicans and Democrats never compromise and can’t get along.’ That’s actually the opposite of the truth,” Paul told host Neil Cavuto. “Republicans and Democrats compromise every day of the year to spend money we don’t have.

“So we were already running a trillion dollars short just with our normal budgetary expenses for the year,” the senator went on. “We added three trillion [with the CARES Act]. Now they’re talking about another one to two trillion. We’re going to borrow $5 trillion in five months. I remember when conservatives complained about George W. Bush borrowing $5 trillion in eight years … [Obama] was a piker compared to their borrowing that they’re doing now.”

Democratic leaders and White House officials are trying to finalize a so-called “Phase 4” emergency aid bill this week and hold a vote in Congress on it next week.

Paul warned that the amount of spending involved in such legislation could have negative consequences for Republicans in November.

“The politicians around here say, ‘Oh, no, we just have to buy more voters by flooding the economy with money.’ Well, guess what?” he asked. “What if conservatives or libertarians that vote Republican decide, ‘The hell with it, you’re acting like Democrats, we’re either staying home or voting for a third party.’ You know what? They might just lose this election because they’re acting like Democrats now.”

Continue reading→

To Hell in a Hand Basket, by David Stockman

The debt the US government has piled on the three last months, added to what it already has, will surely sink the economy. From David Stockman at lewrockwell.com:

The eruption of government red ink literally defies imagination. The deficit figure topped $863 billion during the month of June alone.

Indeed, the number is so massive that it’s hard to put it in context. But consider this: When your editor joined the Reagan campaign in the summer of 1980, the public debt was also $863 billion and it had taken 192 years and 39 presidents to get there.

So during the last 30 days, the clown brigade which passes for a government in Washington has actually borrowed nearly two centuries worth of debt!

Indeed, the numbers for June are so bad as to give ugly an entirely new definition:

  • June receipts of $242 billion were down by 28% or –$92 billion from last year;
  • June outlays totaled $1.105 trillion, representing a +$713 billion or 182% increase from last year;
  • Leading the charge was SBA outlays of $511 billion compared to $80 million last year – and, yes, that’s the PPP boondoggle and it amounts to a 4,400% gain;
  • Not far behind was unemployment benefits at $116 billion compared to $2 billion last year;
  • There was also a $70 billion increase in the cost of student loans owing to CARES act repayment deferrals and an adjustment for massively higher student loan defaults in the future than had been previously assumed;
  • And the red ink total for June, which is usually a low deficit month due to estimated tax payments, rose from $8 billion last year to the aforementioned $863 billion.

Continue reading→

Let Them Eat Weapons: Trump’s Bizarre Arms Race, by Lawrence Wittner

The US government’s enemies won’t have to lift a finger against it. They can just wait for it to go bankrupt. From Lawrence Wittner at antiwar.com:

In late May of this year, President Donald Trump’s special envoy for arms control bragged before a Washington think tank that the U.S. government was prepared to outspend Russia and China to win a new nuclear arms race. “The president has made clear that we have a tried and true practice here,” he remarked. “We know how to win these races and we know how to spend the adversary into oblivion.”

This comment was not out of line for a Trump administration official. Indeed, back in December 2016, shortly after his election, Trump himself proclaimedthat the United States would “greatly strengthen and expand” the US government’s nuclear weapons program, adding provocatively: “Let it be an arms race. We will outmatch them at every pass and outlast them all.” In a fresh challenge to Russia and China, delivered in October 2018, Trump again extolled his decision to win the nuclear arms race, explaining: “We have more money than anybody else, by far.”

And, in fact, the Trump administration has followed through on its promise to pour American tax dollars into the arms race through a vast expansion of the US military budget. In 2019 alone (the last year for which worldwide spending figures are available), federal spending on the US military soared to $732 billion. (Other military analysts, who included military-related spending, put the figure at $1.25 trillion.) As a result, the United States, with about 4 percent of the world’s population, accounted for 38 percent of world military spending. Although it’s certainly true that other nations engaged in military buildups as well, China accounted for only 14 percent of global military spending that year, while Russia accounted for only 3 percent. Indeed, the United States spent more on its military than the next 10 countries combined.

Continue reading

Wow, That Was Fast: Debt Out the Wazoo, by Wolf Richter

Just in case you’re keeping score, here’s the latest on debt. From Wolf Richter at wolfstreet.com:

US National Debt Spiked by $1 trillion in 5 weeks to $26 trillion. Fed monetized 65%. Business debts spike to high heaven.

Trillions are now whooshing by at a breath-taking pace. The US gross national debt – the total of all Treasury securities outstanding – jumped by $1 trillion over the past five weeks, from May 4 through June 8, and by $2.5 trillion for the 11 weeks since March 23.

The total US national debt outstanding has reached $26 trillion, according to the Treasury Department. I’ve been fretting about this debt on my site since 2011. In recent years, I innocently added a green upward arrow with “Debt out the wazoo” to my gross-national-debt charts, unaware that this tongue-in-cheek label would turn into a factual, data-based technical term:

And think about this: The huge mountain of debt that took decades to grow to this gargantuan size has exploded by another 10% in just 11 weeks.

Continue reading

Fear Of The Coronavirus Has Absolutely Destroyed America’s Future, by Michael Snyder

What do you do if you have a mountain of debt you can’t pay? Go deeper into debt! From Michael Snyder at endoftheamericandream.com:

Very few people are talking about it, and even fewer are bothering to object, but by borrowing and spending so much money our politicians are essentially feeding America’s financial future into a wood chipper.  It took from the founding of our country all the way to 1981 before the U.S. national debt reached one trillion dollars.  Incredibly, we just added more than a trillion dollars to our national debt in less than a month.  On April 5th, we were 23.9 trillion dollars in debt, and by May 4th we were 25 trillion dollars in debt.  Fear of the coronavirus has caused nearly all of our politicians to suddenly become socialists, and we are being told that trillions more in spending may be coming.  This is complete and utter lunacy, and we are leaving future generations of Americans with a mountain of debt that would absolutely crush them.  But of course our society may not even last too much longer at the rate we are going.  For years I have been loudly warning that our absurd national debt is an existential threat to America’s future, but at this point both major political parties have completely abandoned any sense of fiscal responsibility.  Now our national debt is rapidly speeding toward the 26 trillion dollar mark, and the House of Representatives just passed a bill that would borrow and spend an additional 3 trillion dollars that we do not currently have…

Last week, House Democrats unveiled their latest pandemic-relief package. The bill combines aid for families, a bailout for struggling cities and states, and additional funds for testing, tracing, and hospitals. The price tag is about $3 trillion—and it comes just weeks after the president signed an economic-relief package worth about $2 trillion.

Since we are destroying the nation anyway, why don’t we make the grand total a nice round 10 trillion dollars like the progressives at the Atlantic are suggesting?

After all, we added close to 10 trillion dollars to the national debt during the Obama years and hardly anyone seemed to mind.

Of course Trump is trying to outdo Obama.  We have already added more than 5 trillion dollars to the national debt while he has been in office, and it looks like more “coronavirus relief bills” could be on the way.

Yes, borrowing and spending money that we do not have gives us an economic boost in the present.

Continue reading→

The Sum of All Broken Promises, by James Howard Kunstler

Debt is being destroyed faster than it can be created by the Federal Reserve and the government. From James Howard Kunstler at kunstler.com:

The restless public, cooped up and idled in springtime’s flowering, have watched Wall Street doing just fine while they see the approaching sunset of their own much more modest Paycheck Protection Program and coronavirus relief checks. Late last week, the Dow Jones shot up 455 points the same day that the government announced the worst unemployment numbers since the lows of the Great Depression. Are there two economies in this country? One for people who expect to work for pay, and another for bankers who play shady games with money and receive extravagant bailouts when their games don’t pan out?

Kind of looks like it, a little bit. That tangled pile of cognitive dissonance is liable to catch fire soon like an overactive compost heap as the promised opening-up of America commences and tens of millions of able adults discover that their old jobs, vocations (and paychecks!) will never re-open, not to mention health care plans and pensions. God help us if the stock markets are still chugging up when that recognition sweeps the land.

Continue reading

Not Your Grandfather’s Recession, by David Stockman

Never before has the US government caused a recession, or depression, simply by shutting down the economy. From David Stockman at davidstockmanscontracorner.com via lewrockwell.com:

Based on the shocking 6.6 million of new unemployment claims, we’d bet they’ll be some explosive political fireworks soon in this country about Covid-containment versus keeping the main street economy alive. There have now been an unprecedented, off-the charts 9.96 million new unemployment claims in the last two weeks.

For point of reference, it took fully 28 weeks to generate the same level of cumulative new claims after the beginning of the Great Recession. During that interval, the largest weekly number was 387,000 during the week of March 29, 2008.

Even when you scroll forward (not shown) to the worst week after the Lehman Bankruptcy meltdown commenced on September 15, the peak number was only 665,000 during the week of March 28, 2009. So today’s new claims number was 10X higher!

Continue reading