June 20, 2021

O’Day: Maxing out America’s credit card

A recent Babylon Bee satire headline read, “Republicans Counter $6 Trillion Budget Proposal With Fiscally Responsible $5.9 Trillion Budget Proposal.” That sums up much of what’s occurred in Washington in the 22 years since Newt Gingrich was forced out of the Speaker position.

An old joke around Washington is that the party out of power is the only one that cares about the national debt, unfortunately Democrats aren’t even pretending anymore. Speaker Pelosi was thrilled last year when Trump chastised fellow Republicans for failing to read his mind and put $2,000 stimulus checks in a bill he provided little to no input on until the last minute.

But for the sober restraint of relatively moderate Democrat Senators Joe Manchin and Kyrsten Sinema, President Biden probably would’ve already signed a $10 trillion budget. Republicans haven’t exactly been deficit hawks over the past four years.

Playing fast and loose with taxpayer and borrowed money is false compassion. It is decadence, not generosity. It is robbing our children and grandchildren of the opportunity to enjoy the marvelous prosperity we have, or even have a fighting chance at living in a fiscally sustainable country.

According to Doug Bandow, a senior fellow at the Cato Institute, between 1998 and 2008 Joe and Jill Biden never donated more than 0.7% of his income to charity. It shot up slightly after becoming vice president and earning more money. I find it ironic he’s demanding a laundry list of new taxpayer funded handouts, but in his personal life he clings to his money like Joel Osteen during a hurricane.

The national debt was already unsustainable before coronavirus. It was $22.7 trillion at the end of 2019. The official number has now risen to $28.3 trillion. But according to the Chicago non-profit Truth in Accounting, the real figure is more like $132.7 trillion. They calculate the latter based on assets and liabilities recorded in the Financial Report of the U.S. Government, as well as unfunded promises to Medicare and Social Security.

To his credit, in 2005 George W. Bush commissioned a non-partisan committee on Social Security reform that would’ve made great strides toward keeping the program fiscally solvent and the country out of crippling debt. But Congressional Republicans at the time cravenly feared it would hurt their mid-term re-election prospects and told Bush to take a hike.

Former President Trump and Congress heaped a blowout record $5 trillion onto the national debt in 2020. About a quarter of that spending was defensible. Biden has already signed a $1.8 trillion covid relief boondoggle, which even Obama’s former economic advisor Larry Summers denounced as potential, “inflationary pressures of a kind we have not seen in a generation.”

Some of this spending has been harmful to the economy, such as the supplemental federal unemployment benefits that have been paying people not to work. Fortunately Kim Reynolds and 24 other Republican governors took action. They saw how this was hurting businesses and cut off the benefits, which weren’t set to expire until September.

Yet Biden has an insatiable appetite for needlessly profligate deficit spending. This $6 trillion budget, as well as the climate change and infrastructure packages he’s pushing are frivolous partisan pandering. All three of his predecessors and subsequent Congresses were irresponsible spenders too, but Biden is making them look like Dave Ramsey.

This is so much worse than a farmer buying a brand new John Deere combine with the flimsy justification of predicting a green harvest next year. When politicians use low interest rates to excuse enormous stimulus bills, they sound more like a single farmer buying an entire fleet of John Deere equipment they don’t need then telling their creditor not to worry because there will be bumper crops and high grain prices for the next 50 years.

If Biden were politically savvy like Bill Clinton he would’ve championed Republican Sen. Roy Blunt’s much more pragmatic $615 billion infrastructure plan, or the Romney-Cotton minimum wage/e-verify proposal. Instead he wants to pretend he’s Obama in 2008, despite razor thin Congressional majorities.

As radio host Mark Levin often says, the laws of economics are like the laws of physics. At some point America will have too much debt to fight major wars, mitigate the fallout of pandemics and natural disasters, or even send out Social Security checks. Eventually gravity strikes.

Slowly the golden goose that is our Federal Reserve will stop laying golden eggs as the value of our currency diminishes with each new omnibus spending bill. In coming decades the interest payment, which is already $378 billion, on the national debt will balloon to the point of crowding out the rest of the federal budget and our debt to GDP ratio will exceed debt ridden countries like Japan. Most of us will be dead and gone when the full weight of this reckless debt crushes future generations.