The Real Problem with Debt Has a Practical Solution - Granite Grok

The Real Problem with Debt Has a Practical Solution

Shaheen’s 12 Years Equals $22.5 Trillion in Debt

Last night a candidate for statewide office made a presentation. The candidate said deficit and debt should be a tertiary priority. This strikes me as myopic. Truth be told it made me a little angry.

Deficits and debt are an issue

Even the President’s new budget confirms America has an issue.  Without corrective action, trillion-dollar deficits will be with us until we take action to change it. The President’s budget proposal has many smart and urgent spending reforms. Congress will almost certainly ignore them. They are a tertiary concern. They are on the campaign trail and free crap is the Siren’s song these days.

The problem is the longer we wait, the less remaining fuse there is on the debt bomb.  The first step in rectifying the situation we have placed ourselves in is to recognize we have a problem.  Then we must admit it is a problem that needs to be solved. We must familiarize ourselves with the facts. The myths need to be dispelled. It is important to understand what the cause is. We have an ocean of borrowing… How to deal with it, how to deal with it? Let’s start with the myths.

Who’s responsible?

Trump did not create these deficits.  That is campaign rhetoric. Look it up, these are the deficits he was facing upon entering office. According to the Congressional Budget Office (CBO), it was expecting the debt to be this high. In fact, they expect it to grow steadily every year. Everyone in Washington knew it. Everyone in Washington knows it. Why aren’t they telling it to you, the people who have to pay the bills? Oopsie… Jeanne Shaheen, Maggie Hassan, Chris Pappas and Annie Kuster what have you done for New Hampshire lately?

For years, Congress has done nothing in preparation for the retirement of about 80 million Boomers.  It has not been a secret that the Boomers would retire or when. The cost to the government was completely known and articulated. Trump can accept blame for not doing more to cut spending. He could have been vetoing budget bills… except wait… we have not had any. We have not had a budget for more than 23 years. Oopsie… Jeanne Shaheen, Maggie Hassan, Chris Pappas and Annie Kuster what have you done for New Hampshire lately?

Then, there are the Trump tax cuts.  According to the political rhetoric, the claim is they have cost $2.3 trillion.  Common sense tells us that’s wrong and here’s why. Following the Trump cut taxes what happened? Federal revenues since the Trump tax cut are up about $150 billion. Revenues went up as a result of the simulative effects of the tax changes. There are more transactions in the economy. There are more people working… paying taxes. The cuts did not cost is anything. They put more money in the Treasury. Oopsie… Jeanne Shaheen, Maggie Hassan, Chris Pappas and Annie Kuster what have you done for New Hampshire lately?

Tax shortfall or overspending?

In fact, taxes brought in more money in 2019 than any other year in history, adjusted for inflation. The tax cuts plus reforms add about $5 – $6 trillion to the economic growth forecast.  Over the decade, 2018-2027, higher revenues from increasing growth and employment roughly offset the rate reductions. I say horse farts on the political claims. It’s time to deal with facts. Oopsie… Jeanne Shaheen, Maggie Hassan, Chris Pappas and Annie Kuster what have you done for New Hampshire lately?

Entitlements are the reason the debt is exploding.  Redistribution programs; e.g. Social Security, Medicare, Medicaid and the Affordable Care Act are surging. So are the discretionary programs. They are up around $200 billion over the last three years. Energy, agriculture, foreign aid and other giveaway programs can and should be cut immediately… immediately. Oopsie… Jeanne Shaheen, Maggie Hassan, Chris Pappas and Annie Kuster what have you done for New Hampshire lately?

The budget went completely out of control when Republicans and Democrats got together. They did so to scrap budget caps and the automatic spending cuts known as sequestration. It’s called the swamp because they are all working together to better position their party. To hell with America, her people of her future… that’s what is driving the federal government. Oopsie… Jeanne Shaheen, Maggie Hassan, Chris Pappas and Annie Kuster what have you done for New Hampshire lately?

Will soaking the rich work?

Taxing the rich will not solve the problem.  There’s no way that is anything but political rhetoric. You see there just aren’t enough millionaires and billionaires. We cannot get money needed to balance the budget from them regardless the tax structure. The rich e.g. Bernie Sanders, Tom Steyer and Michael Bloomberg don’t have enough income… not individually and not in aggregate. Besides, they would move, because they can, to avoid having their wealth confiscated. Oopsie… Jeanne Shaheen, Maggie Hassan, Chris Pappas and Annie Kuster what have you done for New Hampshire lately?

The latest “soak the rich” plans would raise $4 trillion.  That is assuming the rich don’t change any behavior. But even if they stood still for the shakedown, it would only reduce our deficits. Over the next decade debt would continue to accumulate by about an additional one-third.  Oopsie… Oopsie… Jeanne Shaheen, Maggie Hassan, Chris Pappas and Annie Kuster what have you done for New Hampshire lately?

Wealth taxes across the globe have all been colossal failures. Those implemented have gone down to repeal. They do more damage to a nation’s economy than provide benefit to it. Hey, but that’s just experience from history. To have wisdom, you actually have to read history to learn from it. Oopsie… Jeanne Shaheen, Maggie Hassan, Chris Pappas and Annie Kuster what have you done for New Hampshire lately?

Spending our way out of debt

Senators Bernie and Fauxcahontas would authorize nearly $50 trillion in additional, new spending. They want to give you everything free. From “Medicare for All” and the Green New Deal to education spending and student loan forgiveness, free, free, free. That’s the Democrats plan to bring down the deficit. They will bring the deficit down around our ears. They plan to bring down America, to drown her in debt. Oopsie… Jeanne Shaheen, Maggie Hassan, Chris Pappas and Annie Kuster what have you done for New Hampshire lately?

Congressional Democrats want free health care for illegal immigrants. They want to fine you for not buying health insurance. That’s fair, right? They want higher Social Security benefits which will make spending go up. But they aren’t paying for the increase. Someone has to put the dollars into the Treasury in order to pay for the additional benefits. Can you say support a Democrat vote to raise your taxes? Oopsie… Jeanne Shaheen, Maggie Hassan, Chris Pappas and Annie Kuster what have you done for New Hampshire lately?

The Democrats’ solution for rising debt is to spend more. They want to load even more people onto the deck of the Titanic. The new Democratic economic creed is something called Modern Monetary Theory.  Tinkerbelle told them that we can keep running deficits and never have to pay them back. Sure Grok is paying me a trillion dollars for writing this article. Oopsie… Jeanne Shaheen, Maggie Hassan, Chris Pappas and Annie Kuster what have you done for New Hampshire lately?

There is a solution

The deficit and debt problems are not hopeless. Here’s how we balance the budget. First, get to 3% annual economic growth. That will grow jobs. More jobs means more taxpayers. On the flip side more people working means fewer people free riding on entitlement-assistance-welfare payments. There will be more coming in and less going out. Second, impose a cap on overall spending. The cap should be at the lesser of the inflation rate or 2%. This gets us to zero deficits. Was that so hard?

All we really need is the will to nationally break our addiction to deficit spending. Hey, there is a way. We know what it is and we have the ability to do it. Jeanne Shaheen, Maggie Hassan, Chris Pappas and Annie Kuster what have you done for New Hampshire lately? Have you identified the real problem with debt which has a practical solution? If you are not part of the solution, you are part of the problem.