Bankrupting America

Two weeks ago, President Donald Trump signed the largest stimulus bill in U.S. history: more than $2 trillion.

For once, both Republicans and Democrats agreed. The Senate voted 96-0. The House didn’t even bother with a formal vote.

At the White House, a reporter asked the president, pointing out that the bill includes $25 million for the Kennedy Center, “Shouldn’t that money be going to masks?”

“The Kennedy Center has suffered greatly because nobody can go there,” Trump responded. “They do need some funding. And look — that was a Democrat request. That was not my request. But you got to give them something.”

“Something” they got. The bill includes $25 million for Congressional salaries, $50 million for an Institute of Museum and Library Services and lots of other wasteful things.

Only a few politicians were wary. Rep. Thomas Massie complained that he wasn’t even allowed to speak against the bill.

Rep. Alex Mooney asked: “How do you pay for it? Borrow it from China, borrow it from Russia? Are we going to print the money?”

Those are good questions.

Our national debt is already $24 trillion. Now it will jump, percentage-wise, to where Greece’s debt was shortly before unemployment there hit 27%.

Greece was bailed out by the European Union. But the United States can’t be bailed out by others.

How will we pay off our debt? That’s the topic of my new video.

There are really three options:

1. Raise taxes.

2. Print money.

3. Default.

Let’s consider each:

1. Raising taxes on rich people is popular. Even Michael Bloomberg wants “higher taxes on billionaires” like him.

But raising taxes on the rich often kills the wealth and jobs some rich people create. And it won’t solve our debt problem. Even if we took all the billionaires’ wealth — reducing their net worth to zero — it would cover only an eighth of our debt.

2. Some on the left now say, “Don’t worry about debt, just print money!”

This belief, called Modern Monetary Theory, destroys lives.

Zimbabwe’s dictator tried it. Eager to spend more money on wars, higher salaries for government officials and luxury for himself, he had his government print more money. But that meant more money pursued the same goods. That caused explosive inflation. Soon, a $2 bag of onions cost $30 million Zimbabwean dollars.

The more money the government printed, the more inflation there was. They eventually even issued 100 trillion dollar bills. Today those 100 trillion bills are worth about 40 cents.

Inflation wrecked lives in 1920s Germany, Argentina and Russia, and in modern-day Venezuela, too.

3. America could simply refuse to pay our debt. But that would betray everyone who invested in America, and bankrupt Americans who bought Treasury Bonds.

Defaulting on your debt wrecks economies, too. When Argentina defaulted, unemployment rose to 21%.

Once you’re deep in debt, no option is good.

How did we get to this point?

Presidents have talked about the dangers of debt for decades. But they didn’t deal with it; they just talked about it.

“We have piled deficit upon deficit, mortgaging our future and our children’s future,” warned Ronald Reagan. “We must act today to preserve tomorrow.”

Bill Clinton said, “We’ve got to deal with this big long term debt problem.”

Barack Obama called driving up the national debt “irresponsible” and then proceeded to do exactly that.

Donald Trump complained that Obama “doubled” the nation’s debt. But now, under Trump’s presidency and the new CARES Act, our debt will grow even faster.

This will not end well.

So far, the deficit spending hasn’t done enormous harm. But it will. You can stretch a rubber band only so far, until it breaks.

Our debt will wreck our children’s lives.

Yet, today politicians mostly talk about spending more.

18 thoughts on “Bankrupting America

    1. There aren’t any solutions. The debt will eventually fracture our economy. It will be purposeful, intentional and you can mark my words; those who are responsible for this will/already have their money offshore in protected accounts and investments.

    2. Only solution is cut spending by a high amount over the next several years. Cut back entitlements, audit the defense department find wasteful spending and cut that. Cut wasteful spending on nonsense (Refer to Rand Paul, he does an extensive dive into bs spending). Probably hike taxes across the board.

  1. President Trump was wrong you don’t have to give the Democrats anything they’re just wasteful spending on abortion the Kennedy Center other things that’s not helping the American people that’s just helping Pelosi in the Democrats in office that stimulus package should never have been signed

  2. Mr. Stossel, The deficit got out of control thanks to Reagan. If my memory is correct, the debt was around $900B when he entered the White House and around $2.7T when he left. The reckless cuts to the tax rates that he enacted are the cause of the persistent deficits that we have today and, unfortunately, these same tax cuts are politically difficult (suicidal perhaps) to reverse. As Trump proved, any idiot can cut taxes. But it takes a statesman to raise taxes. I am sure it’s an ovesight on your part that you only mention Reagan as a critic of deficit spending, and neglect his record. No doubt you can point to columns or videos where you criticize Reagan. Peace.

    1. pretty sure tip o’niell had a little something to do with the deficits at that time. does the term ‘dead on arrival’ ring a bell? How about TEFRA? the dems promised to cut spending by 2 dollars for every dollar raised in new taxes. only they reneged. weren’t you paying attention back then?

    2. That is naive thinking.

      The last time the US was not in debt was during the Jackson administration— so roughly around 1835.

    3. Congress spends the money, not the president. Reagan had a Democratic House his first term. The Senate was Republican for the first time since 1953.

      It takes a smart statesman to quit spending money you don’t have and balance a budget!

      Any idiot can raise taxes or spend more. Wow.

  3. What upsets me are the dollars for salaries for Congress. They make too much already and we have to give them more? It’s the classic case of individuals on both sides and the gimme, gimme attitude plus the fact that we, as constituents cannot stop the behavior. I wrote my Rep a seething letter and I will not cast my vote for him and will actively campaign against his efforts. It’s a disgraceful show of power and hubris.

  4. Edward Burke it can be done without the pain as described. But America no longer has the backbones to do it. If our division continues we are up the creek. Think this virus is the end all , the great depression did more damage than the Spanish flue.

    1. Another option is to reduce expenses, i.e. government spending, but that would mean eliminating useless government programs,.no longer overpaying for products and services, rooting out and ending government financial corruption, making worthwhile programs more cost-efficient, etc…..and is anyone already in govt willing to do that? Sadly, not likely

  5. Also, Mr. Stossel, I wonder what you wrote or said about the recent tax cuts instigated by the GOP and by Trump. The deficit was around $600B in the last Obama year (2016), but had since grown to well over $1B due to those tax cuts, before the pandemic added even more. Surely someone as concerned with the debt as you are offered an opinion on the GOP tax cuts .

  6. I’m not sure this is all bad as long as it equals help for the average American and not the CEOs and Billionares. The average American is driving older cars, many rent, pay for their own high priced health insurance and at the end of the month and has about $400 dollars to their name. If this money can equal jobs, higher wages, new cars, employer provided benefits and greater savings in the bank then why not.
    But as we all know oil will be the deciding factor in the end. Without resonable energy prices our earnings end up just lining the pockets of the oil companies. Soon as President Bush created a stimulus oil prices went sky high. Which ate up all the last stimulus money the average American made. We need real wages to rise and for people to be frugal and save. We need to keep some of that money here in this country. Although much of the stimulus will head right back over to China……

    1. But surely you have to see that the bulk of this money does NOT equal help for any average American – it equals bail outs and help for special interests and BS that has/had/will have nothing to do with this virus or the people it’s harmed. Nancy flew in from CA to make SURE hundreds of millions went to unions, greenhouse gas emissions, airlines forking over a board seat to a union delegate, corporate boardroom diversity, collective bargaining, the Kennedy Center, museums and humanities special interests, and who can forget the $25 MILLION in Congressional salaries they tacked on…because we all know our Congress members just don’t make enough money to stand up there and bicker like 7yr old children in a sandbox. Make no mistake, this money will NOT create jobs and it darn sure won’t help you buy a newer car or get better benefits from your employer. At this rate we’ll all be lucky to have employers in a matter of weeks. Businesses cannot possibly weather the storm of having NO money coming in, yet be expected to pay bills/rent/insurance/etc. And I don’t mean the 1% of businesses or CEO’s who are swimming in money; I mean every business on main street in every smaller town across this nation. We MUST go back to work and we must do it FAST. Civil unrest is already bubbling at the surface.

  7. Your statement that the oil companies take a large portion of (government stimulus money) we will call it is not wholly complete. If you would look at the amount of capital expenditures that were increased during those time frames you will see a massive cash flow through to job producing activities. The money really does get to working people through increased exploration and production activity. So, many don’t like big oil but they are a huge part of GDP contribution

  8. the only way that is will end is the destruction of the dollar and bankrupting the government and their spending will produce another great depression or worse a civil war

  9. What are they talking about…We’re going to Bankrupt our country…Our Country has been Bankrupt for as long as I remember…That’s why the call it a deficit because it’s Money We don’t have

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