Tag: National Debt

The Grand Debt Deal: Look to the Future


Politics, in times of crisis, surely makes for strange bedfellows. That was clearly evident in the recent debt-ceiling deal, which won with a bipartisan majority in both the Senate and the House, albeit with more Democratic votes than Republican. In the Senate, 46 Democrats and independents combined with only 17 Republicans to put the deal over the top. The vote in the House had 165 Democrats joined by 149 Republicans, with 46 Democrats and 71 Republicans voting against. The vote was clearly one that was opposed by Freedom Caucus Republicans and Progressive Democrats—for, of course, diametrically opposed reasons. The former want less spending, regulation, and taxes, and the latter want more of all three.

The bipartisan middle secured a two-year moratorium on fixing the debt-ceiling problem, which means that the topic will be front and center after the presidential election of 2024, and this could well lead to a sharp switch in one direction or the other. As a political matter, I think that both sides did the right thing when they chose to blink and pass legislation that neither really wants. Each side is in position to claim victory on a far-ranging deal, tendentiously labeled the Limit, Save, Grow Act of 2023, which might not, when all is said and done, achieve any of those goals. This complex statute resists any easy summarization, but the one provision that looks most relevant to a spending bill calls for an automatic 1 percent reduction to all spending programs if the parties cannot reach an annual budget in a timely fashion. That provision is augmented by attempts to rein in spending, deal with the efforts to scoop back the “unobligated coronavirus funds,” “prohibit unfair student loan giveaways,” and expand offshore oil and gas leasing, tightening work requirements for receiving food for people under fifty-four and able-bodied adults who have no dependents at home, and greenlighting the Appalachian natural gas pipeline. Yet there is a $45 billion allocation for dealing with toxic conditions for veterans, which is no mere rounding error, even with today’s stratospheric budget allocations. It was some achievement for the two sides to craft a complex bill that ranged so widely on topics, but no one should be under the illusion that the bipartisan process shall continue after the next election.

President Biden issued a clever victory statement that held out an olive branch to Republicans for coming to the table, only to add that his victory comes from keeping key issues off the table. Thus, he was adamant that his program contained no cuts with respect to Medicare, Medicaid, or Social Security, which to his mind have become not benefit programs but firm entitlements that the government has the obligation to fund, come hell or high water. There is a real risk in taking this hard-line position in light of the precarious financial situation of all these entitlement programs. The Social Security program is expected to run out of money one year sooner than expected, by the year 2034. At that point, the benefits are cut to 80 percent unless additional tax revenues are raised to close the gap. The situation could improve markedly if the economy expands, as is evidenced by the strong labor numbers just released, but underlying uncertainty about world events in Ukraine, the Middle East, and the Taiwan Strait change the picture radically. Medicare is even more precarious: the Hospital Insurance trust fund could be depleted by 2028. The program spends more than it receives in receipts, leading to the need to tap into the trust fund—a need that will only increase with time. Indeed, the current deal, which keeps Medicare off limits, means that nothing will be done within the framework to try to rationalize and restrain a program that constitutes 20 percent of national expenditures on health and 12 percent of the federal budget.

America Faces a Doom Cycle but Nobody Seems to Care


America’s political class can no longer put off the inevitable. They soon will have to pay for their insanely reckless fiscal practices.

It’s not going to be pretty. America’s debt has reached an appalling $31 trillion. Annual interest payments will exceed $1 trillion this year. Debt service is well on its way to crowding out other priorities, a trend that will only accelerate.

Unfortunately, a steep rise in interest rates occurred near the end of the biggest spending binge ever. Economists are warning we are nearing the dreaded “doom loop” in which interest costs can be covered only by more borrowing, which further drives up interest expense, creating a vicious cycle.

Brian Riedl joins Brian Anderson to discuss the state of play in Washington, D.C., the tug-of-war between progressive and moderate Democrats, and the long-term consequences of runaway federal spending.

Find the transcript of this conversation and more at City Journal.

Piling on Debt Is Not the Answer


The consequences of the Great Policy Blunder – shutting down our economy in a futile attempt to escape a viral pandemic – are numerous and devastating. Widespread unemployment, cratering GDP, educational disruption, escalating overdose and suicide rates, and increased racial tensions are just part of the penalty we are paying for decisions made.

But when the dust has settled and we’re in the New Normal, whatever that is, we’ll have to deal with the most lasting of all the self-inflicted wounds – the broad economic destruction that will be the result of piling onto our debt load.

Politicians seem oblivious to the fact that those are real dollars being spent to mitigate the effects of the lockdown. The CBO pegs the additional debt so far at $2.7 trillion since last October.

Rep. Ken Buck (R-Colo.) joined host Ben Domenech to discuss the danger of big tech censorship for the American public. Rep. Buck’s new book, “Capitol Freedom: Restoring American Greatness,” is out now.

Many Republicans argue all private companies ought to remain unfettered by government intervention, but Buck argues that big tech companies such as Google don’t use the extreme level of power they wield over free speech fairly. He debunked the idea that there’s no relationship between privacy and size, saying that if these companies didn’t have a monopoly on free speech, they couldn’t get away with their actions.

Our Debt Nightmare Got Worse


The rascals did it again. Last December, Congress passed a gigantic spending bill that digs the debt hole deeper, using a devious process intentionally designed to be opaque. Americans, never that fascinated with budget issues, were well into the holiday season. Media attention was focused on impeachment and the perpetual horse race.

So, non-nerds may not yet realize that late at night on December 16, Congress released a 2,313-page bill with a cool $1.4 trillion in spending and another $500 billion in tax cuts and favors for special interests.

Brian Riedl and Shai Akabas discuss the U.S. federal budget, budget negotiations, and why Congress hasn’t addressed the rising national debt—even as it gets worse.

The case for a “grand deal” on the budget has never been more evident: within a decade, annual budget deficits are projected to exceed $2 trillion. Entitlement programs are projected to drive trillions in new government debt over the next few decades. Yet increasing partisanship and political polarization—both in Washington and among voters—have significantly diminished the likelihood of bipartisan cooperation to avoid a fiscal calamity.

Member Post


The National Debt is in the news again (after being conspicuously absent from the news during the period 2009-2017, when it doubled). Possible-but-unlikely presidential candidate Howard Shultz thinks that the debt is the biggest threat to national security and prosperity the USA faces. He is right about this, and it doesn’t matter. Here’s what every […]

Join Ricochet!

This is a members-only post on Ricochet's Member Feed. Want to read it? Join Ricochet’s community of conservatives and be part of the conversation. Join Ricochet for Free.

Member Post


We are relearning the danger of law enforcement and spy agencies using “secret” labels and special courts to shield their domestic political collusion and attempted manipulation of both elections and policy-making. At the same time, we would do well to relearn healthy skepticism about secrecy-shrouded military procurement, especially as the pork barrel is rolling again […]

Join Ricochet!

This is a members-only post on Ricochet's Member Feed. Want to read it? Join Ricochet’s community of conservatives and be part of the conversation. Join Ricochet for Free.

David Spady on LA, Stupid People, DACA, and the NFL


David SpadyDavid Spady returns to Whiskey Politics where we discuss if Los Angeles and California can afford the Olympics, the national debt just hit $20 trillion and all we got was this lousy t-shirt (what the heck are Republicans doing to reduce the debt?), Annenberg’s study showing just how stupid people really are, Trump, Pelosi, and Schumer, DACA, and tax reform. Will Trump get a bad deal, and is the Kaepernick effect causing lower ratings and empty stadiums?

Member Post


Senator James Lankford (R- OK) has issued an urgent plea to the Trump administration: start taking the national deficit seriously or else the nation could slip into irrevocable fiscal failure down the line. In a revealing conversation on this week’s OppCast, Lankford lamented that the national debt was almost entirely absent as a talking point […]

Join Ricochet!

This is a members-only post on Ricochet's Member Feed. Want to read it? Join Ricochet’s community of conservatives and be part of the conversation. Join Ricochet for Free.

Member Post


Senator James Lankford (R- OK) has issued an urgent plea to the Trump administration: start taking the national deficit seriously or else the nation could slip into irrevocable fiscal failure down the line. In a revealing conversation on this week’s OppCast, Lankford lamented that the national debt was almost entirely absent as a talking point […]

Join Ricochet!

This is a members-only post on Ricochet's Member Feed. Want to read it? Join Ricochet’s community of conservatives and be part of the conversation. Join Ricochet for Free.

Should We Worry about America’s National Debt?


Of course, Ronald Reagan said the debt is big enough to take care of itself. Still, that headline question is the exact question I asked economist Ken Rogoff last November. From our exchange:

Rogoff: Well, obviously one question is at what horizon are we borrowing? So if you’re borrowing at 30 years, you can certainly carry – it’s a lot less risky than if you’re doing all quantitative easing and you’re borrowing at overnight interest rates when those can change on you very suddenly.

Does Anyone Still Think the US National Debt Matters?



The federal debt-GDP ratio was 74% last year and will be a bit higher this year. Overall it’s twice what it was pre-Great Recession. The CBO baseline forecast puts that debt figure at 86% — and rising — in 2026. Add maybe 20 percentage points or so if Donald Trump is elected, according to analysis by the Committee for a Responsible Federal Budget.

Not that Washington, voters, and many political candidate seem to care. Neither the size of the debt nor entitlement reform have been big parts of this election season. And even among wonks, especially on the left, concern about debt and deficit isn’t what it used to be. After all, the national debt has risen tremendously, yet interest rates are low and the dollar strong.

Three Cheers for Infrastructure Spending!


240673_road_construction_ahead_c898a8e8-fbe8-47ea-b492-4497f91421f4-prvOne of Hillary Clinton’s campaign proposals is for additional infrastructure spending to the tune of $250 billion over five years. According to the Clinton campaign, this program would be paid for by “business tax reform. It’s not clear what “business tax reform” entails, but it sounds to me like higher taxes on corporations and high income earners. Clinton claims this would create tens of thousands of jobs, stimulate the economy and fix a failing infrastructure.

Anyone who’s been paying attention during the Obama years should not be surprised by this proposal. It has been a recurring theme throughout his term in office. Infrastructure spending was a major component of the 2009 Stimulus Bill accounting for $105 billion of “shovel-ready” public works projects in the approximately $900 stimulus package. Obama and congressional Democrats have continued to call for additional infrastructure spending as a stimulus despite the fact that the 2009 stimulus failed in its stated goals of 1) keeping the unemployment rate below 8% (I believe it peaked at a tick above 10%), and 2) in providing economic stimulus (GDP growth has bounced around between 1% and 2% through the Obama years). Even Obama eventually did admit that there were no “shovel-ready” projects.

You would think this would be an easy issue for the Republican presidential candidate to oppose by noting the historical failures of public works projects in stimulating economic growth, and the need to get our fiscal house in order what with the federal government debt over $19 trillion and rising and annual deficits of hundreds of billions that will only rise without major reforms of our entitlement programs. However, you would be wrong. Republican presidential hopeful Donald J. Trump has called Clinton’s proposal “a fraction of what we need” and has at various times called for either doubling or quadrupling of Clinton’s proposal to either a $500 billion or a $1 trillion infrastructure plan. Trump would pay for this massive spending increase by borrowing via the selling of bonds, stating in his usual blustering fashion “We’ll get a fund, we’ll make a phenomenal deal with low interest rates and rebuild our infrastructure.”

Member Post


The political news coverage and conservative pundits have been focused on the political horse race and personalities and not so much on issues.  One wonders where to turn this year so that we do not, as stated in the 2008 Democratic Party platform, “mortgage our children’s future on a mountain of debt.” Scary charts depicting […]

Join Ricochet!

This is a members-only post on Ricochet's Member Feed. Want to read it? Join Ricochet’s community of conservatives and be part of the conversation. Join Ricochet for Free.

Full Faith and Credit?


shutterstock_280678718Why is the United States Government today still considered the finest investment risk in the world? The answer traces to Alexander Hamilton:

In 1789, Alexander Hamilton, the first U.S. Treasury secretary, faced a dilemma still challenging Congress today. The new nation was deeply in debt, and there was a lack of consensus in Congress about how to pay for it. Of the $75 million total debt, everyone back then agreed that the U.S. had to pay in full the $10 million loans from France and other nations to finance the American Revolution. Otherwise, no nation would ever loan money to the U.S. in an emergency again. More than $44 million, however, was owed to American citizens who had purchased war bonds during the war. Many of the original purchasers of these bonds had died or sold them at a significant discount to wealthy speculators. They had lost confidence in the ability or willingness of the infant nation to pay.


Desperate Times?


I often feel that the basic disagreement between Status Quo Conservatives and the more radical Tear-it-Down conservatives is between those who think the government is basically doing a good job — with perhaps some adjustments needed at the fringes (think of Speaker Paul Ryan’s budget plans) — and those who see a $20 trillion debt bomb and growing government tyranny and are desperately seeking a fix. I am in the second camp. Moreover, I think we all can agree that Congress, for one reason or another, does not lead the nation. Nevertheless, there certainly are good people in both the House and Senate who would follow a president who was willing to take the heat for proposing and executing on a radically constitutionalist platform.

Which brings me to why Senator Ted Cruz has always been on my shortlist. Any anti-status quo leader has to be able to take the heat and stay in the kitchen: this is precisely what Cruz did in the Senate. People hated and ridiculed him, and he kept at it, without getting defensive or losing his cool. I can only imagine what it is like to be in that position and not taking it personally.

New Budget Deal Puts National Debt Back on the Rise


Washington in action! From the New York Times:

The House on Friday morning overwhelmingly approved a $1.15 trillion spending measure, as part of a sweeping, year-end fiscal deal that also includes a package of tax breaks worth more than $620 billion for businesses and low-income workers. The Senate was also set to approve the legislation, bundled into a single bill, in a fast-track series of votes later Friday morning. …

Athens on the Potomac


U.S. Debt ChartFinancial experts in New York, London, and Brussels have tut-tutted Greece’s economic travails as Athens considers its future with the European Union. Why did they borrow so much money? How can they ever pay it back? Do they think that much debt is sustainable?

Instead of pointing fingers at the innumerates running Athens, they should consider our own situation. Jason Russell of the Washington Examiner shows how America’s debt projections look suspiciously like Greece’s recent history.

With all the chaos unravelling in Greece, Congress would be wise to do what it takes to avoid reaching Greek debt levels. But it’s not a matter of sticking to the status quo and avoiding bad decisions that would put the budget on a Greek-like path, because the budget is on that path already.