"You load 16 tons, what do you get? Another day older and deeper in debt St. Peter, don't you call me 'cause I can't go I owe my soul to the company store".
In April 1955, radio and television star, Tennessee Ernie Ford released his song “Sixteen Tons." It was a surprise hit, in that it spent ten weeks at number one on the country chart, and also spent seven weeks at number one on the pop chart. When we saw the latest numbers on the growing Federal debt, we thought of this song. It focuses on a hard-working coal-miner who, despite toiling endlessly in the local coal mine, keeps getting deeper and deeper in debt.
The Federal debt numbers aren’t pretty, and are, in fact, mind-boggling. The gross national debt of the United States surpassed $31 trillion on October 2, 2022. Then, eight months later, the federal debt grew to $32 trillion by mid-June, 2023. Now, as readers can see on the front page of our website, the debt has exploded to over $33.7 trillion in just five months. Why is this happening? You don’t have to look any further than the $1.695 trillion budget deficit in fiscal 2023 (which ended this October), which would have been even higher had it not been for an accounting move in August that reversed student loan forgiveness. It was the third-largest deficit in US history, dwarfing only the deficits in 2020 and 2021, when the economy was shut down during the pandemic.
Typically, deficits shrink when unemployment numbers are low, when more people are working and paying taxes, instead of not working and receiving federal assistance. That certainly was not the case in fiscal 2023; although the unemployment rate is low, federal tax receipts still fell by 9.3% to $4.44 trillion. You can’t keep blaming former President Trump’s tax cuts. President Biden and congressional Democrats imposed a long list of tax increases as part of their “Inflation Reduction Act” passed in 2022, yet tax revenue fell sharply.
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This rapid increase in the national debt is happening during a time of sharply rising interest rates. This is a big problem for a government that primarily depends on borrowing to pay its bills. This past year interest expense rose by 23% to $879 billion. This is an enormous amount of money our children and grandchildren will have to pay interest on, even if the debt is never paid off entirely. Wouldn’t you think our leaders would want to do something about this growing debt problem?
Think again. President Biden hasn’t got the message, for in a national address to the country from the White House, he asked Congress to approve $105 billion in additional spending for aid to Israel, Ukraine, Taiwan, border security and other items; and he wants it all passed in one big fat package. This increased level of spending would, of course, require more federal borrowing and a further increase in the federal debt level.
Republicans in the US House of Representatives were happy to oblige part of the Presidents request, for they quickly passed a $14.5 billion military aid package to Israel; however, in order not to increase federal spending and the national debt any further, they proposed a $14.5 billion reduction from the recently passed $80 billion increase in spending for the IRS. They also indicated that they would quickly address the issue of aid to the Ukraine, and the other issues. Senate Democrats said the House bill was dead on arrival, and the President promised a veto. They want the whole enchilada – increased spending with no reduction anywhere. That’s irresponsible. Our debt is much too high; so if we want to significantly increase spending somewhere, we need to look for places to cut elsewhere.
We much prefer the House Republican approach. We should examine each spending request individually and critically, and ask hard questions. For instance, supporting democracy the Ukraine people is certainly noble, but what is our ultimate goal? Last week, Ukraine's top military commander, Gen. Valery Zaluzhny, admitted there will be no breakthrough and the battlefield situation is in a stalemate. Yet President Biden keeps saying that we will support Ukraine “for as long as it takes.” How much will that cost? Shouldn’t we start thinking about some sort of peace plan? Also, as long as we are going to keep supporting Ukrainian democracy in their fight against Russia, shouldn’t we insist that the Ukraine start acting like a democracy?
This past summer, President Zelenskyy said Ukraine's scheduled 2023 parliamentary and 2024 presidential elections would occur only if martial law had ended by that time (it hasn’t yet); and just this October, Ukraine lawmakers passed a ban on Ukraine’s main religious body, the Ukrainian Orthodox Church, due to the fact that it maintains links with the Russian Orthodox Church centered in Moscow.
The sad fact is that there are many, many needs that could be satisfied with a bundle of borrowed money from the federal government. Just to name a few, Democratic mayors from Chicago, Denver, Houston, Los Angeles, and New York are feeling the financial pressure as their cities have been swamped with hundreds of thousands of migrants, and they have asked for $5 billion in federal assistance. There is also a growing mental health crisis and a homeless problem in this country, and we need more and better facilities to help these people. Then there is the biggest financial need of them all – a recent report from Social Security trustees, puts the shortfall at $23.4 trillion! Our country desperately needs to prioritize where it will spend its money, and it must search everywhere to find areas in which to reduce spending.
Here’s one easy target: the Special Inspector General for Afghanistan Reconstruction, John Sopko, recently reported that the U.S. and its allies have been sending “cash shipments” of about $80 million to Afghanistan “every 10-14 days” since the Taliban took over the country shortly before the withdrawal of all American forces in August 2021. America first, maybe? There has to be more areas! Politicians always talk about cutting the waste in government, but it never seems to make a difference.
Within the next few weeks, the battle between the President and the slim Republican majority in the House will come to a head. Our crystal ball is a bit cloudy as to the outcome. Are we going to stick to some fiscal discipline as the Republicans insist, or are we going to be singing along with Tennessee Ernie, as we go “deeper and deeper in debt”?
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