Congress has begun to consider measures to raise the debt ceiling and thereby allow the government to borrow more money to pay its bills. We wouldn’t be in this predicament if Congress made fiscal policy in accordance with reality and not fairy tales. But We the People allow our parties to stick with their fantasies and magical thinking.
Last Thursday, 1/19/23, our national debt reached the debt ceiling of $31.4 trillion. Congress must raise the debt ceiling if the government is to keep meeting its financial obligations. Failure to do so will cause the government to begin to default on its debts, thereby causing widespread and catastrophic fiscal panic.
Our national debt would not be so high were it not for the fairy tales by which our national “leaders” make fiscal policy. The current national debt began to accumulate in 1837, but while in most years the government ran deficits, it ran enough surpluses as well to keep the debt somewhat under control. As recently as 2001, thanks to the budget surpluses produced by President Clinton and the Republican-dominated Congress, the government was able to generate large enough annual surpluses to make the elimination of the national debt within ten years a real possibility, as former Vice President Al Gore argued in his race for the presidency in 2000. But successive tax cuts and spending increases have destroyed that possibility and caused the national debt to skyrocket. Because neither party practices realistic fiscal policies, both parties are to blame.
The Democrats in Congress and throughout the country have long maintained that if one taxes “the rich” at high enough rates, the government can collect money to bring annual deficits under control and thereby slow the growth of the debt and someday even begin to reduce it. But to make even a dent in the growth of the debt, much less begin cutting it, the tax rates on the rich would have to be so high as to stifle and reverse economic growth. Of course, the rich must pay their fair share, but not at a rate that will destroy economic dynamism.
But the Republicans have maintained since 1980, when they embraced “supply-side economics,” that the way to increase tax revenues is to cut—not raise—tax rates on the rich or anyone else. They maintain that tax cuts will pay for themselves by producing enough economic growth to generate more revenue even at lower rates. Yet while the major tax cuts in the administrations of Ronald Reagan, George W. Bush, and Donald Trump were followed by more economic growth, spending—especially defense spending—continued to climb at such high rates that revenue increases could not keep up. The national debt exploded from $914 billion in 1980 to $31.4 trillion today. Only the policies of Presidents George H. W. Bush and Bill Clinton—a combination of tax increases and spending cuts—could temporarily reverse this trend. Since 2001, however, the massive tax cuts and the sharp increases in spending have wiped out whatever progress had been made to taming the debt. Now the government must pay about $400 billion dollars a year in interest alone to assure are creditors that the government won’t default on its debt. Little wonder that George H. W. Bush branded the concept of raising revenue by cutting rates “voodoo economics.”
Today there is no realistic possibility that the national debt can be reduced soon, much less paid off in the ten years once predicted by former Vice President Gore. No significant progress toward fiscal responsibility can be made without some combination of spending cuts and tax increases. Yet spending cuts and tax increases are the two most unpopular policies one can support. Nobody, whether Democrat or Republican, likes spending on his pet programs to be cut. Democrats want no tax increases on the middle class and Republicans want no tax increases, period. Politicians in both parties are too wary of policies that may provoke the voters into removing them from office. They, therefore, hide behind their parties’ respective fairy tales to justify refusing to take the only actions reality demands.
But while we can blame our politicians for creating the fiscal mess we’re now in, we must not let ourselves off the hook. After all, none of the current incumbents in the Senate, or the House of Representatives, or the White House would be in office had we not elected them in the first place. Whether despite or because of the fairy tales they’ve spun, we put them there ourselves. Their fairy tales are ours, too.
Malcolm L. Cross has lived in Stephenville and taught politics and government at Tarleton since 1987. His political and civic activities include service on the Stephenville City Council (2000-2014) and on the Erath County Republican Executive Committee (1990 to the present). He was Mayor Pro Tem of Stephenville from 2008 to 2014. He is a member of St. Luke’s Episcopal Church and the Stephenville Rotary Club and does volunteer work for the Boy Scouts of America. Views expressed in this column are his and do not reflect those of The Flash as a whole.