Enormous deficits reveal class warfare and ideological deceit
You may have noticed that the federal deficit seemingly rose in fiscal 2018 to $779 billion. This official number, however, does not capture the actual growth in debt. Instead it’s a smoke and mirror product of the accounting games played in Washington, D.C., for decades.
Alarmingly, in fiscal 2018, the national debt actually grew by $1.27 trillion! See TreasuryDirect (https://treasurydirect.gov/NP/debt/current) and remember that the fiscal year for the federal government begins Oct. 1 and goes to Sept. 30.
While there, please notice that our total national debt is about to hit $22 trillion, quickly on its way to $30 trillion! This disaster is completely unnecessary.
Part of the cost of winning WWII was to balloon our national debt to about 120 percent of GDP. After the war, though, due to responsible government and strong economic growth, the debt went down to about 32 percent of GDP by 1981.
It could have been paid within a decade, leaving a surplus today. But Ronald Reagan emerged with his supply-side economic model, complete with the ideology that cutting taxes will balance the budget. The national debt increased 2.6 times during his presidency, more than any president going back to WWII.
After seeing the hole he’d blast in the budget, Reagan increased taxes numerous times. George H.W. Bush admirably raised taxes as well. Clinton then increased taxes again. This was the prelude to the strong economy and approximately balanced budgets of the late 1990s.
When George W. Bush started campaigning that we could cut taxes and balance the budget, I naively thought he’d be laughed off the stage.
Instead he became president, and the financial poisoning began. Bush nearly doubled the national debt and handed Obama the Great Recession along with an actual increase of debt in Bush’s last fiscal year of almost $1.8 trillion!
These factors, combined with the GOP congressional refusal to raise taxes, doomed the national debt to double again during Obama’s terms in office. Annual deficits did, however, go down during many of the Obama years.
After taking office, Donald Trump gave the economy a stimulus with his tax cuts and increases in federal expenditures. If you can ignore the huge deficits, this might seem great, but stimulus packages are to boost us out of hard economic times, not to be used as bribes for votes or class warfare.
Many citizens will say, “It’s not the tax cuts that are responsible for our debt; it’s the wasteful, big-government spending” But is that “big-government” statement true?
The total governmental spending in America, including federal, state, and local expenditures, is currently about 36 percent (±1) of GDP. The average from 1970 to 2016 was almost 37 percent. Moreover, compare our 36 percent to Germany’s 44 percent, the UK’s 41 percent, Norway’s 50 percent, Australia’s 36 percent, Japan’s 39 percent, and the Netherland’s 43 percent.
Countries in which people are measurable happier generally have more government expenditures.
The “big government” ideology profusely pedaled by the GOP for decades is a red herring. We don’t have excessive government in America. “Big government” is a misperception; it’s a ruse to divert peoples’ attention from the real problem. The $22 trillion debt we owe is due to unnecessary tax cuts that have mainly benefited the rich.
Four times in my adult life I have seen this pattern: Tax cuts, followed by huge deficits, then “concerned” pleas from conservative politicians to, for the sake of the nation, cut spending — not mentioning that the spending to which they refer is to assist the middle and lower economic classes. Recently Republican Mitch McConnell, Senate Majority Leader, has renewed the attack.
If politicians sincerely want to benefit the majority of people, they would work to adjust the economic structure that’s creating so much inequality and struggle.
On December 16th, the Tri-City Herald ran an op-ed by John Kasich, Republican governor of Ohio, former member of Congress and GOP presidential candidate. It was titled 21-trillion-pound gorilla in plain sight.
Kasich makes what seems like a reasonable argument that America’s debt is too high and in response we should (a) find more efficient ways of addressing human needs and (b) curtail “runaway government spending.”
However, unmentioned by Mr. Kasich is that health care is one of the main items shattering the budget, yet he is a party to those most opposed to adopting a more modern and cost-efficient medical system. Moreover, Kasich neglected to mention the possibility of increasing taxes on the wealthy and corporate.
In reality, it’s lunacy to think we’re going to get a handle on our deficit without raising taxes.
Mark Mansperger is an associate professor of anthropology and world civilizations at WSU-Tri-Cities. His research includes cultural ecology, societal development and political economy.