Reckless Spending, Rudderless Leadership

The United States has $20 trillion in debt as of February 12, 2018. The current fiscal year deficit is $715 billion and we’re only at the halfway point for the October-September budget year. That number is going to rise by 50 percent, at least, over the next decade.

Neither of the two major political parties demonstrates restraint when in power; only when government is divided do we seem to have fiscally sound management of the nation’s budget. The Republican Congress lacks any coherent economic vision. The “tax reform” (sarcastic and ironic quotes) passed wasn’t reform and created a massive hole in the budget.

Libertarian and conservative economists believe lower tax rates with fewer loopholes and deductions could be revenue neutral or even increase revenue through reduced compliance costs. Instead, the GOP passed a tax bill that’s more complex and features more loopholes. The Republicans have no right to claim to be the party of fiscal discipline.

I support tax simplification and genuine reform. I also support a true (dollar) freeze on federal spending, adjusted for inflation and population growth, at least until the annual deficit is minimized. There’s no need to be completely debt free — deficits and debt are managed by families, businesses, and nations with sound economic policies. But, as close to debt-free as possible is what conservatives and libertarians should agree to as an ideal policy so when emergencies do happen we are prepared.

In good times, there should not be an annual deficit and we should pay down the debt. What is happening under the GOP is a disgrace. Spending is out of control, especially in light of declining tax revenues.

The recent budget deal is a disaster, alongside today’s proposed long-term spending plan from the White House.

Budget Deal Reached
CNBC

The deal includes:

• A $165 billion increase in military spending;
• A $131 billion boost to domestic program spending;
• Nearly $90 billion in funding for disaster relief efforts in Texas, Florida and Puerto Rico;
• Two years of funding for community health centers;
• Another four-year extension of the Children’s Health Insurance Program, for a total of a decade;
• Funding for existing infrastructure programs related to transportation, drinking water and broadband.

A $500 billion increase in spending over the next year or two, at least, and adding yet another $1.25 trillion to the national debt should concern every taxpayer and our leaders.

White House Proposes $4.4 Trillion Budget That Adds $7 Trillion to Deficits
By JULIE HIRSCHFELD DAVIS
FEB. 12, 2018

WASHINGTON — President Trump on Monday sent Congress a $4.4 trillion budget with steep cuts in domestic programs and entitlements, including Medicare, and large increases for the military, envisioning deficits totaling at least $7.1 trillion over the next decade.

The blueprint, which has little to no chance of being enacted as written, amounts to a vision statement by Mr. Trump, whose plan discards longtime Republican orthodoxy about balancing the budget, instead embracing last year’s $1.5 trillion tax cut and new spending on a major infrastructure initiative.

People should be disappointed in the Republicans. They should be disappointed in the president, too. Democrats aren’t to blame for the tax bill and Republicans own the spending they approved.

Expect such spending to have eventual effects on bond rates and inflation. A nation cannot borrow endlessly without some penalty from bondholders. Right now, bonds are being supported by central banks. That support is decreasing and there will be a rise in interest rates if something doesn’t change.

The GOP decried debt for eight years. Now, they own it.

Note: State of the Union? Missed it. Budget continuing resolution and two shutdowns? Missed them. Immigration debate? That’s still happening, so I didn’t miss that.

Since January 20, I’ve been under the weather. Influenza, walking pneumonia, bronchitis, and whatever else I could have this winter managed to visit me. I didn’t respond promptly to some rather major news events. Some were non-events, at least.