Great Idea, America
Let's nominate the two people most responsible for the catastrophic debt crisis of the 21st Century
Well, Trump won again last night in New Hampshire. This primary is over. We are headed for a rematch of the last two Presidents of the United States for the first time since Grover Cleveland challenged Henry Harrison in 1892. Cleveland won the popular vote for the Presidency in 1884, 1888, and 1892, but Harrison eked out an electoral vote victory in 1888, interrupting Cleveland’s reelection. Cleveland came back to win in 1892 to be the first and only President to win twice but non-consecutively. Could Donald Trump become the second?
The comparisons don’t end there. Both former Presidents hail from New York and never held office in Washington before becoming President. Both were known for their rotundity, tipping the scales above 250. Both have interesting hair lines and unique faces; both are known to have questionable pasts with women. For those not up on 1880s politics, Cleveland was known to have fathered a bastard (of which the mother accused him of rape) and he married a 21 year old after winning election - Frances Folsom became the youngest First Lady before or since. Trump’s issues with wives and paramours are well documented.
Fun coincidences aside, the fact that the primary is effectively over signals the death knell of our election process, and begs us to admit that our systems and institutions need reform - they no longer serve the interests of the people. The two party system that has dominated this country for 225 years is undemocratic, limits our choices and reinforces the power of entrenched interests and the status quo. President Washington predicted the folly of political parties and factions in his Farewell Address of 1796 [emphasis added]:
In contemplating the causes which may disturb our Union, it occurs as matter of serious concern that any ground should have been furnished for characterizing parties by geographical discriminations, Northern and Southern, Atlantic and Western; whence designing men may endeavor to excite a belief that there is a real difference of local interests and views. One of the expedients of party to acquire influence within particular districts is to misrepresent the opinions and aims of other districts. You cannot shield yourselves too much against the jealousies and heartburnings which spring from these misrepresentations; they tend to render alien to each other those who ought to be bound together by fraternal affection…
To the efficacy and permanency of your Union, a government for the whole is indispensable. No alliance, however strict, between the parts can be an adequate substitute; they must inevitably experience the infractions and interruptions which all alliances in all times have experienced.
Indeed, a government for the whole is indispensable - no alliance between the parts can be an adequate substitute.
Unfortunately, there is not and has not recently been a government for the whole. Compromise is dead. Statesman are long gone. Good people seeking common ground to solve the country’s challenges do not participate in our political process. It is a zero sum game for the spoils of patronage, graft and rent seeking.
Look no further than our national debt and deficit to prove this point. Despite the fact that there was a budget surplus as recently as 2000, deficits have been running out of control ever since. Democratic and Republican Presidents and Congresses have invariably spent money we do not have and forced the Treasury and the Federal Reserve to print money and weaken the value of the dollar. In 2000, the US M2 Money supply was $4T. Today it is over $20T. All of that new money chases scarce resources driving up prices.
These Modern Monetary Policies are reckless, though there is some argument for them in a crisis, we have been living as if there is an unending crisis for the past 24 years. The worst part of our spending surge is that we have nothing to show for it. We are spending $1.8T we don’t have each year for what purpose? Is there something of tangible benefit you’ve received from the Federal Government that you didn’t receive ten years ago? I can’t think of anything.
Even worse, the numbers are catching up to us. With $34T in national debt our debt to GDP ratio is well above 100% - at 122%. As you can see above on the debt clock, just 24 years ago it was 59%. At that time and many times since we’ve been told that a debt to GDP ratio over 100% means the country is likely to default. And keep in mind that this debt does not include any bit of the future unfunded mandates for Social Security, Medicare, Medicaid and other pensions and entitlements that are estimated to add another $163T in unfunded future spending, according to the CATO Institute. Also, notice that the deficit was $10T less just two years ago:
We may have been able to withstand this crushing level of debt while interest rates were close to zero, but in the new inflationary world with treasury yields above 4%, the piper is calling. And he wants his money. Indeed, the interest payment alone on our burgeoning debt reached $730B this year (more than the combined wealth of EVERY American billionaire), and will continue to grow as we continue to spend with large deficits and pay off $0 of the principal. If you’re curious about this payment arrangement, ask a student loan borrower how long it takes to pay a debt off when you make the minimum payments that cover interest only. I won’t touch the irony that the current administration is paying off these debts by printing money to add to the national debt. Here’s one projection of future interest only costs:
Indeed, the interest payments alone on our debt will eventually crowd out our ability to fund defense, social security and everything else. Our wonderful primary system has effectively nominated the two people MOST responsible for this tragic trajectory. We can’t continue like this.