Breaking news: Federal spending is out of control.

I’m kidding, of course. Spending, deficits and debt have been out of control for years. It’s just that last week we broke yet another record.

For the first time in our nation’s history, federal spending topped $3 trillion in a fiscal year’s first eight months, according to Monthly Treasury Statement released in June.

How much is $3 trillion? According to Kiplinger, $3 trillion would pay the salaries of every member of the U.S. Congress for the next 32,336 years.

Of course the issue isn’t just what the U.S. government spends. It’s what the government spends relative to the tax revenue it takes in. In that regard, there’s some good news and some bad news.

The good news: The economy is doing well, causing tax revenue to swell. During this fiscal year’s first eight months, federal tax revenues were the second highest ever collected (they were down slightly from last year’s record amount).

The bad news: Our government continues to spend way more than it takes in — about $800 billion more during this fiscal year’s first eight months, despite tax revenue pouring in.

That $800 billion adds to our national debt, which now stands at a whopping $22 trillion.

How much is $22 trillion? If you were to repay $22 trillion at $220 million every day, it would take 273 years to pay off the balance — on an interest-free loan!

In other words, we have a massive a spending, deficit and debt problem.

What has happened is that the economy expanded by a robust 5.2 percent last year while the cost of government borrowing remained relatively low — one reason why immediate concerns over spending, deficit and debt concerns have waned.

How long we can get away with heavy borrowing is anyone’s guess. As baby boomers retire in big numbers, the costs of Social Security, Medicare and other government programs will soar. We already are unable to pay our bills. The Congressional Budget Office estimates we will begin falling $1 trillion short in 2022 and keep falling short by that amount annually through 2029.

Even this English major can calculate that our national debt may stand at $33 trillion or more by 2030.

How much is $33 trillion? It’s $30 trillion more than the debt was in 1989, $28 trillion more than it was in 1999, $21 trillion more than it was in 2009 and $11 trillion more than it is now.

It worries me that I’m one of the few Americans left who worries that our deficits, spending and debt are out of control.

Tom Purcell is a Pittsburgh Tribune-Review humor columnist.

(20) comments

ronzim

Tom has this mostly right and mirrors some of my remarks in "The Economy is on a Sugar High" below; however, some comment is called for. First, it is not correct to say that "nobody cares" about the growing, dangerous levels of debt. A great many of us do. It's just that those who care are not in control of government policy, so little gets done. Second, the economy did not grow at a robust 5.1% last year as Tom claims. The Commerce Department puts that figure at 2.9% which is, at all events, massive and unsustainable. Moreover, Tom speaks only to government debt and ignores equally irresponsible levels of debt in corporate America and among households as well. Finally, the most glaring omission is his failure to provide any course of action. The underlying cancer in the American economy is the massive and growing level of inequality in both income and wealth. All other economic prescriptions must be subordinated to this ruinous calamity or we will certainly succumb to its ravishes. At a minimum this means: Voluntary Medicare-for-all; tuition-free college; a minimum annual income via Social Security and the expansion of the EITC; elimination of all college debt; desegregation of all elements of society, include school busing; strictly enforcing the NLRA; strictly enforcing the Anti-Trust Laws; and more. As for the debt, we must increase government revenues to cover each year's expenditures, as well as begin paying down the federal government debt. This means increasing the top rate to 65%(effective rate); adding a transactional tax to the financial sector; reprioritizing public health care dollars away from dying elders to treatable children; creating a wealth tax(which would yield one $trillion for each one percent of tax; ending all subsidies to the fossil fuel industry; cutting national security spending by $100 blns/year; requiring polluters to pay the cleanup bills; ending off-shore tax havens; and much more. By these means, we can effectively redistribute income and wealth, reduce poverty and all its ills, become a healthier more productive nation, reduce our federal debt and raise the standard of living across the board.

ArizAl

Them were the good old days. When Democrat President Bill Clinton had no budget deficits three years in a row and was also paying down the national debt instead of increasing it. At the same time he created over 23 million jobs. More jobs than any other president in decades. Yes those were the good old days. Then came republicans George W. Bush and D*ck Chaney with their motto "Deficits Don't matter."

2rusty

Yes, the handling of the national budget stinks, but as long as we keep demanding more services for ourselves and every illegal here, more of OUR tax dollars are going to be frittered away.

jim beck

We've spent over 6 TRILLION on useless/wasteful military actions overseas since 9/11. That's where most of our debt comes from.

jim beck

In fiscal year 2018, the federal government already spent more on interest than it did on budget areas such as veterans’ benefits, transportation, and administration of justice. But over the next few years, spending on interest will exceed spending on a number of additional major categories: In fiscal year 2019, interest will be greater than the amount spent on income security — a category that includes programs such as the Supplemental Nutrition Assistance Program, Supplemental Security Income, and unemployment compensation. In fiscal year 2020, interest payments will exceed the amount that the federal government spends on children, according to projections from the Urban Institute. In fiscal year 2021, interest will surpass the combined amount spent on Medicaid, the Children’s Health Insurance Program, and subsidies for the purchase of health insurance under the Affordable Care Act. In fiscal year 2022, interest spending will exceed all mandatory spending other than that for Social Security and the major health care programs. That budget category, known as “other mandatory” spending, includes programs for income security, military retirement, and agriculture. In fiscal year 2023, the federal government will spend more on interest than defense. (source: Peter G. Peterson Foundation) Interest on debt: The federal government must make regular interest payments on the money it borrowed to finance past deficits — that is, on the federal debt held by the public, which reached $15 trillion by the end of fiscal year 2017. In 2017, these interest payments claimed $263 billion, or about 7 percent of the budget. (source: Center on Budget and Policy Priorities) Think about this example: If there were only $1000. in circulation and, say the interest on that $1000. was $100., where would the money come from to pay that interest? The FED has rigged the system in such a way that the government must continually borrow, if for no other reason that to pay the compound interest on the debt; this means the debt will continually rise. It's a trap and scam on the American worker to keep us and our children's children in perpetual, ever-increasing debt. Common sense should tell us that eventually this insanity will fail. Fasten your seat belt.

2rusty

Good info there, Jim. Wish you could figure out a way to explain to all of the lefties that Socialism isn't the magical panacea to the problem.

jim beck

Rusty, While I'm against socialism, I've recently come to realize that since 9/11 we've spent over 6 TRILLION on military actions in useless wars. This spending is making war profiteers and the FED very, very wealthy. So, the people continue to pay taxes while a few become multi-millionaires/billionaires on the backs of the worker. If the perpetual wars were ended and those TRILLIONS were instead directed to benefit the PEOPLE, I could support such action (even if it were called, "socialism").

ArizAl

Rusty, You are correct in that socialism (government ownership of all the means of production, distribution and sales) is not the answer to fix our nation's spending problems. While the spending problem is not one of socialism , it is indeed one of Fascism/corporatocracy/ Oligarchy where corporations merge, take control of our government to put forth political agendas that insure corporations and their wealthy owners/,CEOs increase their profits/income. Republican President Dwight D. Eisenhower warned the nation about the dangers of the merging our government's military and the private idustrial complex. Taking our country into tremendously costly wars with lies and phoney made up excuses so that the war profiteering corporations can increase their profits,has a cruel,sinister side. That is, even on phoney wars, the cost of wars run into the spending of billions to trillions of taxpayer dollars. We are also exchanging the lives of our sons, our daughters, husbands, wives who are in the military, just to increase the profits/income of the war profiteering corporations and their executives.

Kahuna

Trump has repeatedly shrugged off concerns about the debt, implying that he doesn’t have to worry about the money owed to America’s creditors—currently about $21 trillion—because he won’t be around to shoulder the blame when it becomes even more untenable. The friction came to a head in early 2017 when senior officials offered Trump charts and graphics laying out the numbers and showing a “hockey stick” spike in the national debt in the not-too-distant future. In response, Trump noted that the data suggested the debt would reach a critical mass only after his possible second term in office. “Yeah, but I won’t be here,” the president bluntly said.

ronzim

Welcome back Jim. Always appreciate comments which are not only cogent but backed by some research. What you say is very important and should be one of the top priorities of our government leaders. It is essential for the government to increase revenues to the level of all expenditures by more progressive taxation and to raise additional monies for paying down the debt by a wealth tax. Just two percent would raise over $2 trillion/year which would provide $1 trillion for debt retirements and $1 trillion for infrastructure and other expenses. You did not mention the vastly bloated defense budget which annually consumes(wastes) most of the $1 trillion it spends. A years-long audit by two of the nation's leading firms reported that no report could be made because the Pentagon could not account for $21 trillions and had no auditable budget plan related to anything other than large annual increases. If the DOD were a private corporation, it would be bankrupt and its officers would be in jail. We could easily get another $100-200 billions there. I have identified about $3 trillion more, below, which can balance the budget; pay down the debt; rebuild our infrastructure; fund Medicare-for-all, tuition free college, retire the $1.6 trillions now burdening former graduates, superbly defend the nation, and fund all safety net programs without debt. We need only the political will to do these things. I am also concerned about the USD's status as the world's reserve currency because it's strength is in decline while others are on the ascendency. The aggregate of our federal, state, local, corporate and household debt staggers the imagination. It is a house of cards which can only be held up by massive and unsustainable growth in our GDP. I fear that next year's election will result in no change, for the economically suicidal reason that no candidate can earnestly promise to rectify the matter. After all, raising taxes is thought to be a death knell to any campaign. As long as the public demands benefits without paying for them, our troubles can only deepen.

jim beck

Hi Ron. For decades I was a Independent. When Rep. Ron Paul ran I switched by party affiliation to Republican in order to vote for him. A very serious problem, however, is that the establishment controlled mainstream media has such influence on the electorate that any candidate who opposes the establishment will not be allowed equal time in the news or the debates (or favorably in talking head discussions). Establishment candidates will receive plenty of air time while those candidates promising to end the status-quo establishment control are basically forgotten. This is blatantly unfair -- all candidates should receive equal time, in my opinion. The people can be given needed benefits (i.e. medicare for all, free college, upgraded infrastructure, etc.) without raising taxes if we ended our decades long, perpetual military actions and those trillions could be redirected to aid the people. I can't remember when I was a registered democrat, but Rep. Tulsi Gabbard is speaking my language. Her anti-military-complex stance is exactly why she is kept in the closet by the establishment media.

ArizAl

Very good Kahuna. Donald Trump and the republican party are promoting Fascism as is evident in their passage of The Tax Cuts and Jobs Act of 2017 which will increase the national debt by 2.3 trillion dollars in 10 years and will benefit mostly already profitable corporations and by default, the top 5% of rich individuals. Unnessary tax cuts like the Trump tax cuts decrease the nation's tax revenues which also increases the need for more borrowing to cover the costs of providing services to the citizenry. However, republican Fascists always propose to cut governmental services for the middle class and the poor to make up for the free money given the corporations and the rich by way of the Trump tax cuts. Historically, republicans have used the mantra "Starve the Beast" (defund) to refer to the government helping the middle class and the poor americans. That is Fascism. As FDR's Vice President, Henry Wallace wrote in 1944 after defeating the Nazi Fascists and the Italian Fascists in WWII, about Fascism in the United States: "The american fascist is the man who wants to do in the United States in an American way what Hitler did in Germany in a Prussian way. The American fascist would prefer not to use violence. His method is to poison the channels of public information. With a fascist the problem is never how best to present the truth to the public but how best to use the news to deceive the public into giving the fascist and his group more money or more power." "Fascism should more appropriately be called corporatism because it is a merger of state and corporate power." Still another danger is represented by those who, paying lip service to democracy and the common welfare, in their insatiable greed for money and the power which money gives, do not hesitate surreptitiously to evade the laws designed to safeguard the public from monopolistic extortion. American fascists of this stamp were clandestinely aligned with their German counterparts before the war, and are even now preparing to resume where they left off, after 'the present unpleasantness' ceases." Fascists have an agenda that is primarily economic. As the Free Dictionary notes, fascism/corporatism is "an attempt to create a 'modern' version of feudalism by merging the 'corporate' interests with those of the state." Feudalism, of course, is one of the most stable of the three historic tyrannies (kingdoms, theocracies, feudalism) that ruled nations prior to the rise of American republican democracy, and can be roughly defined as "rule by the rich." Thus, the neo-feudal/fascistic rich get richer (and more powerful) on the backs of the poor and the middle class."

ronzim

agree Jim, and I am not biting the hand that feeds me as a professional military officer, now retired. My professional opinion is that the Quadrennial Defense Review, our National Military Strategy and our force posture have long ago been captured by hyper-aggressive parties and have been relentlessly tailored to create our permanent war stance across the world. In 'USA Astride the Globe', we were warned, as with other voices on this matter. The problem is that "militarists" have succeeded in a broad-ranging mission capture by the DOD, especially in the case of the State Department where the real national security responsibility lies, but which has been tirelessly superseded by DOD with concomitant transfers of funds. You may be right about providing all the social services without increasing taxes or debt. In a prior submission, I identified $5.1 trillions per year which could be found to pay down the debt while funding the AOC-Sanders-Warren constellation of services, all of which are supported by large majorities of the American people. I did include a top rate of 65% and both a transaction tax on Wall Street and a small wealth tax; however, I did not include elimination of the enormous subsidies doled out to the fossil fuel industry; thus, there is room for some compromise. Nice to hear from you.

ronzim

Al/Kahuna: [thumbup][love]

godenich

Consider transitioning to a decentralized 0.3% flat tax[1,2] on the $4 quadrillion liquidity flows tax base[3] instead of a 10-37% graduated income tax on a $10 trillion subset of the liquidity flows tax base[4] and average 6% sales tax plus 10% capital gains tax, excise taxes, subsidies and tariffs. Apportion these tax revenues to local governments so constituencies, through their locally elected representatives, may moot how their tax dollars are spent and regulate funding of appropriations to state and federal governments. Consider also setting up a sinking fund to extinguish an amount of principal on national debt to maintain good standing with present and future primary lenders to Federal debt. This 0.3% flat tax replacement for the current 10-37% graduated income tax raises net wages, net profits and allows for lowering the price of goods, services and exports. The decentralized form of this tax enables local governments to lower property taxes to encourage growth of business and jobs in their community. This tax reform also addresses tax leaks from tax havens[5] and saves $800 billion/year on tax processing overhead costs. 1. Alternative Proposals Reform, May 11 2005 | Video | C-SPAN (2nd 5-minute speaker) 2. Taxation for the 21ST Century: The Automated Payment Transaction (APT) Tax | SSRN 3. Intraday Liquidity Flows | FRBNY 4. Summary of the Latest Federal Income Tax Data, 2017 Update | Tax Foundation 5. [PDF] Treasure Islands | Nicholas Shaxson

jim beck

Godenich, But your suggestions would require the wealthy to pay their fair share--that would never do. The tax burden is, and always has been on those of us who are not rich. We are the slaves of these masters and they will never allow that to change--sad as that may be.

jim beck

According to the 'Business Insider' (2/20/19), "The US Treasury has been tracking day-by-day debt accumulation since the start of 1993, meaning daily debt figures are available for the presidencies of Bill Clinton, George W. Bush, Barack Obama, and Trump. "In raw terms, Trump added the second-most debt of any recent president. According to the Treasury data, the US added $2.07 trillion — $2,065,536,336,472.90 to be exact — in new debt between Trump's inauguration on January 20, 2017, and February 11, when the country pushed past $22 trillion. (The US added another $2.8 billion through February 15, the latest daily figures available.) "That is less than the $3.46 trillion added between Obama's inauguration in January 2009 and February 11, 2011, but it is more than the $676 billion added under Bush and the $617 billion added under Clinton in their first 752 days as president. "One important difference between Trump's debt figures and Obama's is that Trump has added a massive amount of debt while the US economy has been strong, whereas Obama took over during the depths of the financial crisis. " During Reagan's term in office the national debt increased 13.2%, George H.W. Bush-10.5%, Clinton-9.5%, and Obama 16.8%. (source: theBalance.com)

ArizAl

The constitution empowers the congress to levy and collect taxes. and to borrow money (Article 1,section 8, clause 1) The problem we have is two fold, one of too much spending plus the cutting of revenues through tax cuts and tax evasion schemes by the rich and by the profitable mega corporations. That combination causes the government to borrow money and thus increase the national debt. The questions that needs answered is: How do we want our taxes to be used, to help the american public, the needy, for education, for healthcare for all americans , and to help the small business community or do we want to subsidize profitable large multi-national corporations and ultra rich persons? Why is there a means test for a poor person to qualify for food stamps or unemployment, while large profitable corporations like the oil industry corporations get subsidized in spite of their profits being in the hundreds of billions? Not only do the corporations get subsidized with our tax dollars ,in addition, some are able to to get millions/billions in tax refunds even tho they are on coporate welfare. Moreover, it is a well known fact that the more profitable a corporation is, the bigger the salaries and stock options are for bureaucrats and CEOs who run the corporations. In essence, when we subsidize a mega corporation, we are also subsidiziing the salaries of those who manage it.Spending/ Spread the wealth is real, what matters is how and where we spread the wealth. "I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of our country....corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong it's reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the republic is destroyed." ....President Abraham Lincoln "I hope we shall...crush in it's birth the aristocracy of our moneyed corporations which dare already to challenge our government in a trial of strength, and bid defiance to the laws of our country." ....Thomas Jefferson "There once was a time in history when the limitation of government power meant increasing liberty for the people. In the present day, the limitation of government power, of government action, means the enslavement of the people by the great corporations, who can only be held in check through the extension of governmental power." ....President Theodore Roosevelt Sept. 14,1912 "Unfortunately, the corporate Fascists are now in charge of running a large part of our government and are further weakening it until all government power is subservient to the corporate masters."...ArizAl

ronzim

From: Exhibit S.2.a, FEDRES Z.1 Report(06-06-19): U.S. Net worth = $108 trillions(down significantly since my last report). Of this amount, the $22 trillion debt of the federal government equals just over 20% of our net worth and is already included in the total, as are the negative figures for the financial sector and non-financial corporate businesses. I point this out to show that our balance sheet is still viable and we can afford to borrow, but not for very much longer. The big dog on our balance sheet is (households and non-profit institutions serving households) at over $103 trillions. The other sectors are small in comparison. A closer examination reveals that a large portion of our net worth consists of real estate and pension obligations. As we know, these assets are subject to widely variable valuations during periods of financial instability. The real-world state of our balance sheet is therefore correct but somewhat parlous under stress. Moreover, the continued global strength of our dollar has far too much in the way of confidence and far too little in the way of competence for comfort's sake. I make bold to suggest that now is the time to retrench and begin the process of balancing our budget and, at the very least, making token payments on the debt. Otherwise, we court disaster such as that we only narrowly escaped during the Great Recession. A significant problem is our reliance on unsustainable GDP growth to shore up the large amount of borrowing we do, and to maintain the dollar as the putative reserve currency of the world. Where big amounts are concerned, safety always trumps earnings as the placement motivator. Money will therefore continue to flow to our bond auctions only so long as those bonds are viewed as safe by investors. Money has no loyalty. We are also addicted to low interest rates in order to persist in borrowing at all levels. Nonetheless, even a cursory familiarity with mathematics shows that a sustained annual GDP growth rate of just 2% demands that GDP increase by a factor of over 398,000,000 in just 1000 years. GDP growth is a form of economic cancer, especially since growth has gone increasingly to Capital v. Labor over the past 50 years, and must be treated by productivity growth and better distribution of the same pie. As is always the case, if we do not get population under control, nothing else can save us.

2rusty

Hadn't looked at this discussion for a while. I'm sure that there are many salient facts and figures in here, but it's a perfect example of why the budget and debt issues never get solved: they're so bloody boring that most of us glaze over pretty quickly. Just sayin'.

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