Dakota Beacon

Grassroots gleanings on the national debt are a dime a dozen but, for the record, here are my two cents worth. Did anyone know the national debt reached a milestone as announced by the US government February 1, 2022?

The US Treasury Department announced the US topped $30,000,000,000,000 in debt. News that the U.S. government debt has surpassed $30 trillion was hardly noted by the media cartel and raised not a stir among politicians. Federal Reserve Chair Jerome Powell told Congress last month the debt is growing faster than the economy and is unsustainable in the long term. Powell proposes to raise interest rates making the government’s borrowing costs more expensive.

Note that the largest pieces of the national debt include health care (25.5%) and Social Security (23.6%). These programs require mandatory funding and cannot be cut. Defense comes in third at 15.4% and falls into discretionary funding, a category that can be cut, i.e., fiddled with. These three programs comprise 64.5% of the total debt. Another 30% of US debt is foreign owned (first Japan followed by China).

For perspective, Sen. James Lankford (R-Okla.) compared the debt to time. As a time comparison, 30 trillion seconds is 1 million years. Do your own calculations.

The media cartel gave President Biden and Congress all the cover necessary to ensure the road to socialism is paved with gold -- literally. On December 16, 2021 President Biden signed Senate Joint Resolution 33 into law raising the debt ceiling. Congressional legislation is often made up of thousands of pages. S. J. Res. 33 took less than half a page and 44 words thus raising the debt ceiling by another $2.5 trillion enabling Biden to fund his Build Back Better initiative.

Distinguish two terms. The deficit is dollars spent each year above and beyond what the US takes in. The debt is the dollar shortfall accumulated year after year by deficit spending.

A bit of history. Keynesian analysts from the 1930s through the 1970s believed budgets did not have to be balanced from year to year. They only needed to be balance over the course of a “business cycle.” Surpluses in times of prosperity made up for deficits during times of recession. Problem: No fiscal period could be identified accurately as a “business cycle.” Deficits accrued repeatedly into a national debt and became the rule, not the exception. National debt grew, and the world did not come to an end. The public was lulled into a false sense of security and the media barely reported the national debt. Today no one is alarmed.

But wait! The debt ceiling is not the real issue. The real issue is DEBT piled upon DEBT without restraint. Raising the debt ceiling doesn’t solve the problem. It perpetuates it. The problem with kicking the can down the road is that we eventually run out of road. What’s so terrible about insisting that spending be reduced rather than the debt limit be raised? Come to think of it, why be concerned with a debt limit at all? On every occasion when a debt ceiling is set by law, Congress turns around and raises the ceiling as they see fit whenever their profligate spending habits warrant government expansion. The US has created a perpetual motion machine of spending. Congress absorbed the lessons of Modern Monetary Theory and determined that debt doesn’t matter, nor should it get in the way of pursuing its policies.

Take inventory. Currently we have no constitutional spending limits such as an amendment that would impose restraint by law. We have no truly firm ceiling or limits on government financial outlay. The debt ceiling adjusts upward whenever Congress feels like it. We have no fiscal discipline. The US operated with on-again off-again budgets for years. We have no able-to-be-scored written plan from the White House or the Senate that would warrant a debt ceiling increase.

Spend-aholic insanity is a lot like alcoholism. There is no question the US is financially bankrupt with a debt of trillions of dollars. We’re just not ready to admit it. To ease the pain we lapse into denial. A dose of reality would shatter that denial. The risk is not default on our national debt. Default would only occur if Treasury Secretary Janet Yellen chose not to pay the interest to creditors holding our debt. We barely have the monthly tax revenue to pay that interest. Besides, the US could always print more money – or raise taxes even more.

The real risk is the downgrading of the US’s financial rating by Moody’s and by Standard & Poor’s, the major credit rating agencies. If the US’s debt ceiling continues to increase but Congress and the president do not show a willingness to restrain the skyrocketing spending, the US’s credit worthiness becomes worthless. Downgrading the US’s AAA rating would ruin our financial standing around the world and the dollar would no longer serve as the world’s reserve currency. Decline in this status would take years to regain, if ever.

A thought. The financial constraints and regulations that Congress is so fond of imposing on the private sector should apply equally to government departments. The biggest monopoly and money waster in the US today is the federal government.

My guess? Biden does not want to be Jimmy Carter II. He may be rescued by the 2022 election when the House and Senate revert to Republican control. Then, he can blame all the US problems on the Republicans heading into 2024. And round and round we go.

Dennis M. Patrick can be contacted at (JavaScript must be enabled to view this email address).