According to the debt clock, the U.S. is now over $34.6 trillion in debt. Our government has borrowed so much money that the debt share attributed to each citizen, regardless of age, is almost $103,000. If you remove all citizens and break this down by taxpayers only, the figure is almost $267,000.
At the time of this writing, it appears that we will have a re-match between Donald Trump and Joe Biden in the race for the White House in 2024. Both men have had a term in office during a period in which there has been an unprecedented expansion of our national debt. A baby born in January 2001, just before the inauguration of George W. Bush, was born into a world where the federal budget was balanced and the national debt stood at $5.7 trillion. Since that time, he/she has lived through a 23-year period that has seen the White House evenly split between Democrats and Republicans, both of which bear responsibility for increasing our national debt during that period by almost $29 trillion. This young person played no part and had no say in running our national debt up to $34.6 trillion, yet he/she and their generation will bear much of the responsibility of paying for it.
Although the spending that led to this debt has been despicable, we can’t undo the past. What we can do is band together to encourage candidates to develop a plan to reverse this trend and begin paying down our debt. So far, Donald Trump has been talking about tamping down inflation, and tax cuts, and getting the economy going so that it works for everyday Americans. I am in complete agreement with two of these objectives but, although I generally support the principle of tax relief, we don’t need tax cuts in a vacuum where our larger spending and debt problems are ignored. We must consider the big picture.
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Now, let’s discuss Joe Biden’s recent State of the Union Address. He did not take the blame for the immigration invasion that rests on his shoulders, or the associated costs (which are in the billions of dollars) that go with it.
One of the few times he mentioned the deficit was to take credit for what he claimed was $1 trillion in deficit reduction. While it is true that the deficit is less than when he assumed office during the pandemic, it is still well above where it was pre-pandemic. During his speech, Biden also called for raising taxes on the wealthy and some businesses, as well as calling for middle-class tax cuts. He did not define the middle class and although he talked about spending a lot more money, I don’t recall him saying anything about spending cuts. Perhaps there is the possibility that some of what Biden mentioned could have merit under the right circumstances; however, I believe the problem with government finances is more on the spending side than the revenue side. Raising taxes without addressing the entire picture will not solve our debt problems.
Many conservative groups, such as Americans for Tax Reform, are always in favor of tax cuts but almost never in favor of any tax increases. Likewise, many liberal groups are almost always in favor of tax increases but rarely in favor of any tax cuts. Most Republicans align with the conservative groups and vote against tax increases, while most Democrats align with the liberal groups and vote against tax cuts. The only thing that Democrats and Republicans seem to have in common is they both like to spend huge amounts of money. Given this situation, it is no surprise that our nation is over $34.6 trillion in the hole with a debt that continues to grow.
As a businessman, my desire for this country from a fiscal point of view would be that we have a limited, yet efficient, government with a low tax rate and a balanced budget. Unfortunately, given the fact that Democrats oppose almost anything that Republicans do, and vice versa, I don’t believe this desire will be realized any time soon. On the other hand, I do believe that we can, and must, bring fiscal sanity back to our nation sooner rather than later.
Given the dysfunction and partisan bickering in Congress, I believe the path to fiscal responsibility can be found through the creation of a bi-partisan Fiscal Commission. Fortunately, some members of Congress, realizing the need, have already started working on this idea. On January 18, 2024, the House Budget Committee passed the Fiscal Commission Act of 2024 on a bipartisan vote. If this bill can make it through the House and Senate, and then receive the President’s signature, it will set up an independent commission to make specific recommendations to Congress for adjustments needed on spending and revenue in all areas of the government’s finances.
Although I am not under any illusions that this Commission will make recommendations that any of us will consider perfect, I do believe that it will provide recommendations that can put us on a path to a sustainable financial future, as opposed to the unsustainable path upon which we now find ourselves. The idea of a Fiscal Commission has been attacked from both the left and the right, which is the reason I believe this to be the correct path to take. We live in a country with political divisions so deep that no one is going to get everything they want. The best that we can hope for is to find common ground that leads to real solutions that everyone can live with.
If you are concerned about your financial future and the continued prosperity of the United States, then I urge you to contact your Congressman and Senators and ask them to support the Fiscal Commission Act. If we can enact this commission and follow-up with a constitutional amendment that constrains government spending to a percentage of our gross domestic product, then I believe that our best days as a nation can still be ahead of us.
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