5/14/2024
ttps://www.msn.com/en-us/money/markets/america-is-running-out-of-money-and-nobody-cares/ar-BB1mn295?ocid=msedgdhp&pc=U531&cvid=b5492fa0a4974790b82bfabf4503d77d&ei=15
I don’t believe that – that nobody cares. The people care; but, the politicians we elect don’t seem to want to tackle that problem. That should be a question we should remind the elected officials every day and especially before we vote for them.
It is time to attack the problem; but, how, when the following happens:
We cannot keep supporting wars with borrowed money for other countries. We seem to give billions every other week and trillions the first week to foreign countries. Look what Biden’s One World Order immigrants being brought into the country cost.
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America is running out of money, and nobody cares
American national debt has spiralled out of control – John Minchillo /AP© Provided by The Telegraph
An economic specter haunts America. It’s also one that many American politicians – Republican and Democrat – say a great deal about but are reluctant to address.
The name of that shadow is the United States National Debt: what the US Treasury Department defines as “the amount of money the Federal Government has borrowed to cover the outstanding balance of expenses incurred over time.”
If you go to the Treasury’s website, you can see just how big that debt is. In mid-May, it was 34.5 trillion dollars. The pace of the growth in that debt is equally stunning. Approximately 1 trillion dollars is being added to America’s National Debt every 100 days.
Historically-speaking, America’s National Debt has taken on huge proportions during national emergencies like World War II. Funding such extraordinary measures, as well as more mundane government activities like infrastructure-development, is what the US National Debt has traditionally been used for.
America isn’t, however, presently fighting an all-out hot war with an adversary akin to Nazi Germany bent on world-domination. Nor is the Federal Government spending much on infrastructure, judging from the state of America’s highways.
The truth is that the rapid growth in America’s National Debt is driven by two factors. The first is spending on major entitlement programs like Social Security, Medicare, and what is called Income Security (for example, unemployment benefits).
Related video: Almost Half of Americans Don’t Know How to Protect Themselves From Running Out of Money (Money Talks News)
Continued below:
Almost Half of Americans Don’t Know How to Protect Themselves From Running Out of Money
Taken together, these programs constituted 68 per cent of Federal Government spending in 2023. As the pace of boomers retiring from the workforce accelerates, that figure will grow.
The second factor at work is that US government tax revenues aren’t covering government spending. In 2023, the federal government collected almost 4.5 trillion in revenue, but spent 6.16 trillion. That trend has been in place for some time. Since 2000, successive presidents and Congresses have papered over this revenue-expenditure gap by expanding the National Debt.
The economic consequences of this trend are well-understood. First, it impedes economic growth by putting upward pressure on interest rates. As the bipartisan Committee for a Responsible Federal Budget states, “Each percentage point of debt-to-GDP increases interest-rates by about five basis points.” That means less productivity and therefore less economic growth.
Second, a growing public debt and higher interest rates on that debt divert more capital away from the private sector and into Treasury bonds. The less-productive public sector thus steadily assumes a bigger role in the economy. That too translates into less economic growth.
Yet another negative effect of a metastasising public debt is its impact upon individual and institutional investors’ faith in the US government’s creditworthiness. Few things would be more destructive to the US economy than such confidence being fatally compromised by domestic and foreign investors concluding that the US government cannot meet its debt obligations.
These problems are well-understood by legislators on both sides of America’s political divide. Back in October 2023, a bipartisan group of Congressmen proposed creating a bipartisan federal debt commission to try and address the challenge. But for months, this proposal has struggled to gain traction. Why so?
One reason is that legislators from both parties have few incentives to tackle the problem. It’s hard to see, for instance, how significantly reducing the pace of the national debt’s growth (let alone diminishing the national debt’s size in real terms!) can avoid making substantial reductions in entitlement programs. Trying to sell that to the millions of retired and soon-to-be retired progressive and conservative Americans who receive some of their income from these programs is an electoral Mission-Impossible.
Anyone even suggesting that spending cuts are unavoidable would face an electoral backlash from these sizable segments of the American electorate: people, incidentally, far more likely to vote than younger Americans. It’s not for idle reasons that both Joe Biden and Donald Trump have ruled out any major cuts in entitlement expenditures.
Then there is the revenue side of the equation. Democrats insist that any national-debt reduction must involve tax-increases. They regard this as essential if they are to sell expenditure reductions to their constituencies. In response, Republicans point out that tax increases will suck more capital out of the private sector, thereby diminishing productivity and growth.
But even beyond the hard economics, any Republican senator or member of Congress voting for tax increases would face a serious primary challenge. For if anything still unites the seriously fractured American Right, it is loathing of tax increases and those who vote for them.
From this standpoint, America’s National Debt challenge constitutes a political iron cage for Democrat and Republican legislators alike. While they can talk a big game about courageously tackling the problem, the political consequences of actually doing so are deeply unattractive for both parties.
America’s political class consequently chooses to live in a fiscal unreality. Yes, that may save their political skins. In the long-term, however, the specter of America’s National Debt’s profound dysfunctionalities will darken more and more of America’s economy. In that world, there are no winners.
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ttps://www.msn.com/en-us/money/news/both-parties-are-part-of-the-spending-problem-steve-moore/vi-BB1moMWm?ocid=msedgdhp&pc=U531&cvid=3d47849a978d4e359190b7e599341cb7&ei=112
Both parties are part of the spending problem: Steve Moore
Committee to Unleash Prosperity co-founder Steve Moore discusses the government’s growing food stamp spending and ballooning national debt on ‘The Bottom Line.’
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