We need to recognize her accomplishment and retire Jeanne Shaheen while we can still afford it. Ten years ago the federal government reached a milestone. Perhaps we should call it now a millstone. That was the point when America first reached a one-year deficit of $1 trillion.
Now we are viewing the sequel annually whether we want it or not; whether we need it or not.
Are we alone in debt accumulation?
There is a new Congressional Budget Office (CBO) report. It reveals the federal deficit for the current fiscal year has once again exceeded $1 trillion. The driving force behind America’s deficit is a rapid increase in spending. Federal outlays are up 7% compared to 2018. That far outstrips inflation, population growth, and growth of the economy… combined. Is America alone in its dance with debt? America’s situation can be compared to that of other developed nations.
The Great Recession of 2008 ate into tax revenue. At the same time stimulus legislation generated record high for spending. Trillion-dollar deficits lasted from 2009 through 2012. The U.S. was not alone in debt accumulation.
What have we done about it?
The recession devastated the global economy. It damaged the bottom line of other nations too. Most responded by reining in deficits as the economy rebounded. Why is America not also reducing spending?
Global growth over the last several years has been robust. Most developed nations are taking advantage. They are shrinking the size of their debt relative to the size of the economy. This “debt-to-GDP” ratio is important because it points to the ability of a nation to afford its level of debt.
Where does that leave us?
The U.S. will have by far the largest debt growth relative to its economy over the next five years. That is the International Monetary Fund projection. America’s fiscal health should be stronger than our counterparts. Revenues are up 3.4% from 2018. The vibrant economy means less safety net spending compared to recession years. The military is not fully engaged in war.
Our Congress chafes at even modest spending restraints. There is a lack of political pressure. This is allowing big-spending legislators to spend irresponsibly. Budget caps have been repeatedly overridden. Deficits are rising.
America is now right back where it started 10 years ago at trillion-dollar deficits. The 2019 deficit could ultimately dip below $1 trillion depending on September’s numbers. But a $960+ billion deficit for the year is inexcusable, unacceptable.
Where does the money go?
The majority of federal dollars do not go toward defense or benefits for illegal immigrants. Most spending and spending growth are focused on social benefit programs. These are specifically Social Security, Medicare, and Medicaid. These programs are growing faster than the rest of the federal government.
Their size and rapid growth make them fundamentally unsustainable. They have become a threat to the economy. Medicare premiums have long been artificially low. The government does not properly index Social Security benefits to inflation and life expectancy. The overwhelming majority of retirees receive more in benefits than they paid in payroll taxes. Both programs are in serious trouble.
What happens if we don’t react?
The Baby Boomer generation is entering retirement. The imbalance of retirees to active workers is leading to explosive deficits. Those deficits will bankrupt the trust funds in the next few years. To avoid sudden and painful cuts reforms are necessary. The longer Congress puts off reform, the harder it will be to avoid either painful cuts or economy draining tax hikes.
Members of the House and Senate Appropriations Committees cite the importance of entitlement reform. They do so as a reason not to worry about annual spending which is under their direct control. The federal government wastes countless billions every year. The money chases badly designed, badly administered, and straight-up bad programs. Not one penny of waste should get a pass.
We need to act… now!
We should be streamlining spending. Congress’ job is making the tax code more fair and efficient. Doing those things protects the country from dangerous debt levels. It enhances economic growth. Germany, Canada, the United Kingdom, and France are all on pace to control their debt.
Conclusion
Americans should expect the same responsible governance from their elected officials. We need to hold them accountable. Senator Shaheen has been in place for nearly 12 years. Each of those years has resulted in greater debt accumulation. Not only has she run up the debt she now declines responsibility to control spending to bring our debt back under control. Shaheen’s 12 years equals $22.5 trillion in debt which makes her part of the problem not part of the solution.
