Tick, tick, tick – young folks please raise some holy hell on this

Tick, tick tick…the US debt of $20.7 trillion is expected to increase by $10 trillion by 2027 even before the December Tax Bill and last night’s Budget Bill were passed.

Tick, tick, tick…per the nonpartisan Congressional Budget Office and Committee for a Responsible Federal Budget, the Tax Bill is projected to increase the US debt by $1.5 trillion or so by 2027.

Tick, tick, tick…last night’s Budget Bill which has now been signed into law is expected to increase the debt by $400 billion over the next two years.

Tick, tick, tick…unless something is done about it, the debt will be close to $33 trillion in 2027. The scarier thought is that might be low.

Tick, tick, tick…the added dilemma we are facing is the interest rates are increasing, since we may have overheated a good economy. That will add further to the annual interest cost on the debt.

If I were in my twenties, I would be raising holy hell about this. I just called several members of the Freedom Caucus, telling them I am an Independent and former Republican voter. While they were right to raise issue with the $400 billion, I said it was hypocritical to vote for a Tax Bill that increases the debt by $1.5 trillion.

Invariably when I called I spoke with a nice young staffer in their twenties, because I asked them if they were. During our conversations I asked them “you do realize we are leaving this problem for you?”

In December, 2010, the US debt was over $13 trillion. The reason this date is important is the bipartisan Simpson-Bowles Deficit Reduction Committee presented their findings and recommendations in that month. In essence, they recommended a series of changes that followed a ratio of $2 of spending cuts to every $1 of revenue increases. Since Democrats did not like the former and Republicans the latter, the Committee’s good work was shelved.

Fast forward to today and not only have we not done much about it, we have made the problem worse with these two bills. In Congress, it is both parties’ fault. It is President Obama’s fault for shelving the Simpson-Bowles study and it is President Trump’s fault for not making this an issue and promoting tax cuts. It is President Bush’s fault for passing tax cuts against the advice of his Secretary of the Treasury after being handed the baton on a balanced budget.

Our deficit was $666 billion in the last fiscal year. It will be over $1 trillion at the end of this one. This is not good. Please let your Congressional representatives, Senators and the President know we need to do something about this. We need revenue increases and spending cuts. The math will not work otherwise. Please check out the websites for the nonpartisan Committee for a Responsible Federal Budget, Fix the Debt and The Concord Coalition for more information.

 

 

28 thoughts on “Tick, tick, tick – young folks please raise some holy hell on this

  1. Excellent post … you said what needs to be said. Let us hope that the right people are listening. I like to compare it to the family that lives beyond their means year after yearr. Eventually it catches up, for one cannot spend what they don’t have forever.

      • Quite true, and nor is it likely to be heeded anytime soon, but still … we have to try to wake people up. Part of the problem, I think, is that once you put so many zeros behind a number, it becomes unreal to most people, and they tend to shrug their shoulders and go on in search of something more comprehensible. I could be wrong, but it just seems that once you pass a million, people”s eyes glaze over and they cannot relate, so they ignore.

      • Jill, you are so right. Maybe we should focus on the interest cost getting closer to 1/2 what we spend on military. And, that percentage will increase. Keith

  2. Reblogged this on Filosofa's Word and commented:
    Amidst all the hoopla and smoke & mirrors that defines Trump and his administration, there are some very serious long-term policy decisions being made that will affect the future of this nation. Friend Keith Wilson has brought one to the limelight, and we should all be taking this one seriously. Please take a moment to read Keith’s post about our national debt and where we are heading. Thank you, Keith, for the clarification.

  3. I am glad that you are paying attention and pointing this out. Thank you. I hope everyone who can get involved does so, and perhaps things might even change for the better. Let’s hope so.

  4. Note to Readers: One of the lines columnist Mark Shields likes use about our debt is we have financed three wars with three tax cuts. That shows a lack of stewardship and has caused a ballooning of our debt.

  5. Dear Keith,

    Thanks for explaining things so well and for making all those phone calls. Do you realize that we who call are probably creating jobs?

    When I am calling the lawmakers, I not only refer to their hypocrisy about previously hating deficits for years, but now with their epiphany and with and with a swish of their hand, they have added almost 2 trillion dollars over a decade to the US deficit to get what they wanted which was tax cuts for the rich and increased spending for military.

    One staffer dared to challenge me with need to reform entitlements. I countered that they just increased the welfare payments for the rich by their $6 trillion dollar decrease in taxes for them over the decade when they had already benefited tremendously in the past few years. She said I had my figures wrong I explained that the supposed $1.5 trillion dollars price tag was really a net number arrived at by increasing taxes on the middle class/ poor over the next 10 years by $4.5 trillion dollars.

    But then I pushed the concept that now the republicans needed DACA more than the democrats. There needs to be an increase in legal immigration because businesses will soon be desperate for employable bodies but here we already have possibly a million young folks, already American in everything but by paper who could all easily be part of the US workforce for years to come.

    Hugs, Gronda

    • Gronda, thanks. You are a trooper as well. I hope to get a live person so that I can have a conversation. It also relaxes me. On messages, I find myself trying to cram in a lot of information. I have only been challenged a few times over the years, as that occurs when someone called back who may have been a subject matter expert. Keith

  6. Dear Keith,

    I just read on a tweet by Jim Tankersley that Morgan Stanley analysts are projecting that US companies expect to pass on 13% of Trump’s tax savings to their employees versus 43% towards stock buybacks. For manufacturing the numbers are 9% versus 47% .

    Hugs, Gronda

    • Gronda, those are interesting percentages. So, just shy of 1/2 of the tax cut will go to stock buybacks which is a sign of weakness. It means, we don’t have a plan to raise revenue or become more efficient, so we are going to prop up earnings per share by reducing the denominator. Why? To make EPS bonus targets easier for e executive bonuses. Boards tend to let management get away with this because they are doing the same at their company.

      I fully realize I am speaking in generalizations, but what I described happens much too often. Keith

  7. I fear the figures have moved into the area of all smoke and mirrors, and one day when the lawmakers are called to account they will have nothing solid to show and then will come the collapse of the dam of confidence and a deluge with follow.

    • Roger, when speaking in trillions, people have a hard time fathoming that. Here is more concise way to look at it. A projection (before the budget vote) shows our Interest cost on the debt to be 36% of our defense cost. In five years, it is projected to be 52% of the defense cost. That is shows the dramatic nature of a runwaway debt. I am trying to get folks to say this is a problem now, as it was a problem eight years ago. Keith

      • A while back I worked out in rough terms that when you physically measure the debt in terms of dollar coins it would reach half way to Mars.
        We have a similar albeit smaller problem made unnecessarily even more complicated by the Brexit

      • Roger, our so called leaders seem to be making less than prudent financial decisions. I think the amount of debt per US citizen is around $70K. Per taxpayer it is much more.
        Keith

  8. Note to Readers: Paraphrasing what I usually say, anyone can get elected if they do a tax cut. Unfortunately, the converse is true. Yet, we need legislators with courage to do the necessary thing and raise taxes and make spending cuts. They may not get reelected in our short attention span country, but they will be fiscal heroes.

  9. Note to Readers: I sent out a variation of this post in an email and pasted it into my two senators and Congressman’s website template. I did want to clarify two points. Bush was handed a budget surplus over $200 billion in 2001, which was still over $100 billion by the end of the fiscal year 9/30/2001. The other is Obama also decided with Congress to continue the Bush tax cuts for the majority of Americans when they expired after ten years.

    I also wanted to mention after the Secretary of Treasury, the retired CEO of Alcoa who turned them around, actively advised against the tax cuts, Bush had him fired. The Secretary was right. Keith

  10. Note to Readers: Per Reuters, part of Dan Coats’, the Diector of National Intelligence, comments to the Senate Intelligence Committee on 2/13/2018:

    “I‘m concerned that our increasing fractious political process, particularly with respect to federal spending, is threatening our ability to properly defend our nation, both in the short term and especially in the long term,” Coats told the Senate Intelligence Committee:

    “The failure to address our long-term fiscal situation has increased the national debt to over $20 trillion and growing. I would urge all of us to address this challenge.

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