March 19, 2018
There’s a taboo topic out there nobody is talking about.
We used to mention it. And at times, it’s been a big deal. But today – silence.
I’m talking about our national deficit (we’re over $20 trillion and counting).
I’ll give President Clinton credit – during his term, cutting spending was a priority. You could say it was politically-driven, since the deficit was a big issue in both the 1992 and 1996 elections.
Either way, he succeeded in cutting the deficit, primarily through capital gains taxes.
But then 9/11 happened, and everything changed. New spending took hold in the form of an entire department devoted to homeland security.
It trickled into other parts of government too – think the Medicare Part D prescription drug plan.
When the deficit is 3 percent of GDP or less, as it was not so long ago, spending is not a big deal.
Under President Obama, the debt rose to 10 percent of GDP, and a new era of fiscal concern was born. It was short-lived though, as the deficit has only risen since then and now nobody seems to care.
Not a single candidate campaigned on deficit reduction leading up to the 2016 election. Not President Trump. Not Hilary Clinton. Not even Rand Paul!
But think about it – every time we’ve worried about the debt, nothing has really happened. So, is it such a bad thing to run big deficits?
I tend to think it is. Big debt can lead to higher interest rates. With the government first in the borrowing line, if it causes a 2 percent increase because of its borrowing, that trickles down to regular folks’ mortgages.
And yet, federal spending doesn’t seem to be an issue in 2018 or 2020.
I guess both parties like spending money.