Increasing the Debt is Malfeasance

If I may be permitted to be crass, let me offer a quote from an unknown source, “any dumb ass can get elected saying they will reduce taxes.” I will let you be the judge at how successful this campaign approach is.

In the United States, we have about $20.5 trillion in debt, which is roughly $63,000 per person and $170,000 per taxpayer. With an annual budget of about $4 trillion, we had a deficit in our most recent fiscal year ending September 30, of roughly $650 billion. The deficit is predicted to only go up, if we do nothing which will in turn increase the debt by an estimated $10 trillion.

With the President’s encouragement, Congress has proposed doing something. But, it is in the wrong direction. The Republican majority has passed a budget that will allow for net tax reductions in the Tax Bill being considered that will increase the debt by an additional $1.5 trillion over the next ten years.

Again, that is on top of an estimated $10 trillion increase. By my math, that puts us at $32 trillion of debt in ten years. There is no other way to say this. This is malfeasance. It certainly is not good stewardship.

The bipartisan Simpson-Bowles Deficit Reduction Committee completed their findings and recommendations in the fall of 2010. That earnest and diligent effort recommended $2 worth of expense cuts for every $1 of tax increases. We simply cannot cut our way out of the problem. But, this well done report was shelved.

I have heard several members of Congress over the years tout a balanced budget, but that is not enough. We actually need more revenue than expenses. That must include tax increases along with spending cuts. It is that simple. We cannot make the math work otherwise.

If we continue to hide from this problem, like climate change, it will become a major obstacle. We must act now and we certainly do not need to cut taxes and revenue. People will not like this answer, but someone needs to shoot straight with our citizens. We all need to pitch in before it is too late and we leave ourselves, kids and grandkids a mountain of debt.

There are several groups that have been raising this alarm for some time now. “Fix the Debt” and “The Concord Coalition” are just two. Please check them out and let your Congress representative and senators know this is too important a problem to make worse. If they say the taxes will pay for themselves, tell them it does not work that way and they should know that. Let’s fix the debt, not make it worse.

9 thoughts on “Increasing the Debt is Malfeasance

  1. Dear Keith,
    There is nothing positive that I can say about the republican’s tax cut bill. Like their healthcare proposals, this is a complete sham.
    I also supported the Simpson-Bowles Deficit reduction plan as a reasonable bi-partisan solution.
    The republicans are not passing bills because they are bad legislative work products.
    Hugs, Gronda

    • Gronda, I listened to the writer of the bill who discussed between the changes to deduction plus expected growth it would pay for the bill. That is simply fantasy. My Congressman speaks of facts – growth plus jobs. Those are projections, not facts and very, very optimistic ones. Companies are sitting on cash, so giving them more won’t add jobs. The 1986 Tax Reform took about three plus years with folks who knew what they were doing. Keith

  2. Note to Readers: The following excerpt comes from the Committee for a Responsible Federal Budget, another nonpartisan group:

    The Tax Cuts and Jobs Act (TCJA) would lose $1.5 trillion and significantly worsen our already unsustainable budget outlook. However, the cost could be even higher after accounting for higher interest spending and gimmicks embedded in the bill. Ultimately, the House tax plan could add over $2 trillion to the debt. As a result, trillion-dollar deficits would return by 2020 and debt would exceed the size of the economy in just over a decade.

    • Lisa, it frustrates me when legislators don’t take the time to do things right, but when they fudge on the math to perfume the pig, it is maddening. If you did not see the Note to Readers I added regarding the understatement of even the $1.5 trillion debt increase, take a peek. Plus, earlier this year on the 2016-17 budget Mick Mulvaney sent to Congress double counted the impact of perceived growth. It was used to pay for two different things, which was beyond sloppy. Thanks for your comment, Keith

  3. Note to Readers: A few things Congress should strongly consider. Any tax changes cannot be deficit neutral or negative (i.e. increase the deficit). We must eat away at the debt, so more revenue is needed.

    With Social Security, I would increase the taxable wage base to $175,000 or so which will draw in more FICA taxes and the cost of added benefits is less.

    I would increase the minimum wage to a living wage for one person and index it for inflation. That would take the minimum to just over $10 per hour. That helps people in poverty, will increase spending and increase FICA taxes and withheld federal taxes in some cases.

    There must also be some spending cuts, but as with all of this, it must be done on a bipartisan basis. Major tax changes cannot be jammed down folks throats as we end up with poor bills. This was clearly in evident with the ACA repeal bills and the first tax reform bill.

    • Janis, this issue takes courage, which seems to be in short supply. While Obama will be remembered as a pretty good President, my greatest frustration with him was his shelving the Simpson-Bowles Deficit Reduction effort. Republicans showed no stomach for tax increases suggested in this report and Dems did not want the spending cuts.

      Scrolling back in time, Bill Clinton worked with a Republican Congress to get the deficit down to zero, but did nothing with the debt, which was more manageable then. George W. Bush went against the vocal recommendations of his Treasury Secretary Paul O’Neill to reduce taxes, eliminating the balance and putting us back into deficit.

      Both parties are to blame and both must be part of the solution. I do find fault with Republicans who tout debt reduction and then take a key lever off the table. The Concord Coalition gets meetings with Republican legislators, but the conversation is shut down when they also speak of tax increases along with spending cuts. Keith

  4. Note to Readers: The CBO scored the House tax plan as increasing the deficits and debt by $1.7 trillion. That is important as if any bill is more than the $1.5 trillion allowed in the passed budget, it must go garner 60 votes when it moves to the Senate.

    Additionally the nonpartisan Tax Foundation noted the middle class tax cuts promised in the House bill may fade away in ten years. The push back on the bill has been significant and it is being reshaped.

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