The Forgotten Debt

Congress and the media obsess endlessly over whether President Donald Trump should be impeached.

Both ignore $23 trillion of bigger problems.

That’s how deep in debt the federal government is now, and because they keep spending much more than they could ever hope to collect in taxes, that number will only go up. It’s increasing by $1 trillion a year.

“Shut up, Stossel,” you say. “You’ve been crying wolf about America’s debt for years, but we’re doing great!”

You have a point.

For many years, I’ve predicted that government, to fund freebies both parties want, would print boatloads of money. That would cause massive inflation. I bought silver coins so I might afford a loaf of bread while the rest of you haul suitcases full of nearly worthless paper currency to the bakery — or go hungry!

Clearly, that inflation crisis hasn’t happened.

Thanks to Trump’s contempt for the “deep state’s” love of endless regulation, businesses are hiring and stock prices are up. America is doing great.

But while our deficits haven’t yet created a crisis, they will. You can stretch a rubber band farther and farther. Eventually, it will snap back — or break.

We can’t pay off our increasing debt — unless we’re willing to tell the government to stop stationing soldiers in 80 countries, stop sending checks to poor people and old people, and stop paying for “free” health care for people like me. If the government did stop, the public would revolt.

Voters scream if there’s even talk of cuts to Medicare or Social Security. But the programs are unsustainable. Social Security was meant to help the minority of people who outlive their savings. When Social Security was created, most Americans didn’t even reach age 65. Now it’s an “entitlement” for everyone.

Social Security, Medicare, Medicaid and other federal health care spending account for about half of the federal budget, and because we old people rudely refuse to die, these “entitlements” consistently grow faster than the tax revenues meant to fund them.

Anyone serious about giving our kids a future has to be willing to make big cuts to those programs, or at least privatize them and let individuals make our own decisions with our own money.

But good luck to any politician who proposes that.

By contrast, voters don’t get stirred up as we just quietly sink farther and farther into debt.

So politicians demand even more spending.

Last week, Senate Minority Leader Chuck Schumer said appropriations bills won’t get passed by the end of the year unless Republicans agree to spend “significant resources” on fighting the opioid epidemic, gun violence, child care, violence against women, election security, infrastructure, etc.

“With a Democratic House consumed with impeachment, there is very little appetite for the sorts of common-sense fiscal policies that could rein in our out-of-control deficits and debt,” says Republican Sen. Ted Cruz.

That implies that if Republicans were in charge, they would restore fiscal order. But there’s little evidence of that. Republicans talk about spending cuts and “responsibility” but rarely cut anything.

Democrats want new social programs. Neither party wants to reduce the military budget. Trump wants his wall and tariffs. Farmers, once proud independent capitalists who criticized welfare, now get 40% of their income from the government.

“The federal budget is on an unsustainable path,” says Federal Reserve Chair Jerome Powell.

No matter who you vote for and no matter what speeches they make, none of them is doing anything to put us on a sustainable course. It’s too bad.

Fortunately, thanks to the inventiveness of American entrepreneurs, our economy keeps creating new wealth for politicians to grab.

That might mean Congress wouldn’t have to cut spending for America to gradually grow our way out of this terrible debt. All they’d need to do is make sure spending goes up slower than the rate of inflation.

They won’t even do that.

21 thoughts on “The Forgotten Debt

  1. “The America of my time line is a laboratory example of what can happen to democracies, what has eventually happened to all perfect democracies throughout all histories. A perfect democracy, a ‘warm body’ democracy in which every adult may vote and all votes count equally, has no internal feedback for self-correction. It depends solely on the wisdom and self-restraint of citizens… which is opposed by the folly and lack of self-restraint of other citizens. What is supposed to happen in a democracy is that each sovereign citizen will always vote in the public interest for the safety and welfare of all. But what does happen is that he votes his own self-interest as he sees it… which for the majority translates as ‘Bread and Circuses.’

    ‘Bread and Circuses’ is the cancer of democracy, the fatal disease for which there is no cure. Democracy often works beautifully at first. But once a state extends the franchise to every warm body, be he producer or parasite, that day marks the beginning of the end of the state. For when the plebs discover that they can vote themselves bread and circuses without limit and that the productive members of the body politic cannot stop them, they will do so, until the state bleeds to death, or in its weakened condition the state succumbs to an invader—the barbarians enter Rome.”

    Robert Anson Heinlein

    1. Doesn’t matter what you call it- entitlement, not entitlement, retirement fund or “money I paid to the government to save for me”- it is already bankrupt. There is no money there and when the balance tips (more retired than working) it will fail. So there is no need to to cut it and maybe you will get yours but ultimately it will crash and bring everything else around it down. Getting belligerent and defiant about it is certainly your right but it won’t change the reality.

    2. “A perfect democracy…has no internal feedback for self-correction.” You’re absolutely right, Max. A perfect democracy is mob rule! That’s why the only democratic element the framers allowed into our constitution was the popular election of representatives, elected by the PEOPLE and tasked with representing the interests of the PEOPLE of their respective districts. Perhaps most important, congressmen were made accountable to their constituents EVERY TWO YEARS. Senators were to be appointed by the several states to represent their respective states and the president is selected by the states (through appointed electors) and the president appoints justices to make up the judicial branch. The notion of a popularly elected official UNACCOUNTABLE to the people for six long years (or even four) would be anathema to the framers.

  2. Social security is not an entitlement!! I have paid into it since i was 14 years old as well as other anericans!! Its not a benefit to be cut!!

    1. No, it’s not an entitlement, it’s a pyramid scheme. The money you paid in since you were 14 is gone, it’s been given to prior retirees long ago but even if it wasn’t, without it being invested, the $1/hour a retiree put in when they were 14 doesn’t nearly cover their expenses today because of inflation.

    2. Your Social Security payments went to pay for the benefits to your parents and grandparents. They were not saved or reserved for your retirement. Unfortunately, that’s how the Social Security system was set up. Our grandparents paid in very little but got decent benefits. Now, the SS system is facing a crisis. There won’t be enough in reserve to fund because people are living longer. It leaves us with four bad choices – 1. Cut benefits, 2. Raise retirement age, 3. Increase contributions by younger workers (our children) or 4. Run out of money, then payments stop. Which is your preference? My opinion is that a combination of 1, 2, & 3 is needed so that any one remedy is not too extreme.

  3. John, you are right on! We are stealing from our grandchildren to pay for current consumption. Retirement that is paid for by someone else isn’t sustainable. Even Republicans won’t do anything because, having elections every two years, the real job of congressmen and Senators is to get re-elected. They’d rather that the whole system collapses because no one could hold them personally and exclusively responsible. This is the fallacy of democracy.

  4. I have worked for 45+ years and I have always paid into my retirement and medical insurance. Social Security is not an entitlement I worked hard for my Social Security and I do not want the government putting their hands on it or cutting my benefits. I think we need to do is stop the pensions of the Congress and their medical insurance I think they should live off of Social Security and government insurance Medicaid Medicare just like the rest of us

  5. I see the refrain, “Social Security is not an entitlement!” every time someone talks about debt. You people are deluded. The US government invented Social Security and created a Ponzi scheme. The money you so self-importantly brag about ‘investing’ with Social Security all those years was spent as soon as the thieves in Congress got their grubby paws on it. So you are saying, in effect, “Social Security is NOT an entitlement! I paid into it and I’m ENTITLED to that money!”
    What John and other people who can add are trying to point out is that the day of reckoning will arrive and at that time it won’t matter if Social Security is an entitlement or not. No one will get money. Or are you hoping to be safely dead and good luck to your grandchildren?

  6. Congress — 1. Drastically cut Spending, we can’t pay for your giveaways.
    Congress — 2. Debt reduction requirement
    Congress — 3. Overhaul Social Security, extend retirement age and raise tax rate.
    Congress — 4. Raise tax rate on Medicare

    Congress do nothing else until all 4 of these key issues are fully resolved. In # 1. Immediately stop all Foreign Aid. Reduce the size all governmental departments by substantial reduction of at least 25%. Eliminate as many governmental departments as possible, it makes no sense to send money to DC for redistribution back to States. Department of Education as well as Commerce and Labor need drastic reduction or total elimination.
    Eliminate IRS, Income Tax is a disaster go to Sales Tax ratcheted up to match spending. Thus 100% of the population will have a stake in governmental spending , instead of only the privileged working class (AKA Taxpayers), thusly the populace will howl loud enough for even Congress to listen.

  7. Social security is a wonderful thing for blue collar folks that never made enough money to actively invest in their retirements. I may be mistaken but I believe that’s what it was originally designed for. Today, where everyone that pays into it gets it, well, that’s not sustainable in an age where people routinely live into their 80’s. The math doesn’t lie. Further, if you happen to be lucky enough to make six figures all your life, what social security takes and what you get back at retirement is theft. Say you pay 500,000 into the SSA over the course of your career as a white collar drone; at $3000 a month at 65 you’d have to live forever to get your money back. However, if they privatized the SSA and the money you paid into the system was responsibly invested you’d have a small fortune to retire on at the end of your career and the government could eliminate the burden.
    Secondly, I don’t like Warren, Sanders, Biden, Trump, Pence, any of them really. But the leftists have a point; everyone pays for health care one way or the other. You either pay it out of your own pocket or the government subsidizes it and you pay for it anyhow through taxation. If the government did a responsible tax reform bill and made health care universal like Canada has, well that’s sustainable. Would you pay more in taxes, yes, would you pay zero for health care, yes. It would be a net wash in the end and it would end a great deal of corruption in the health care industry. Doctors would no longer be able to become millionaires off of the federal government. Same for drug manufacturers and hospitals. That’s my take on it anyhow.
    None of this will ever happen though. Our system is irreparably broken, the powerful take care of the powerful and that is NEVER going to change. We don’t live in an era where 1776 could EVER happen again. As long as the American public has a job, a house, a car and a few bucks in the bank no one will ever care what the political establishment is doing to destroy our country. That’s the genius of the American system. Other despots control their population through violence or starvation, here in America they do it through wealth and comfort. As long as you and yours are comfortable you will never care and you will never do anything to change the system. That’s exactly how they like it. Sad day…

    1. Robert…you must have a pension since you want SS cut. People have paid into SS for 50+ year and deserve a hefty monthly check (money they’ve paid in PLUS interest on the money the government has withheld from them). Pensioners have paid little and get much. That is entirely backwards.

      Raising taxes is a complete joke. The politicians just use that money to spend on mire non-essential programs. If you ever read the history of taxation in America, you will know that the income tax was started by the newly-formed Federal Reserve in 1913 (started by the Rockefellers and Vanderbilts) and of course we we were lied to then just like we are constantly today when they stated that the income tax “will never exceed 1% of our income”. I’m waiting for that promise again!

      Want to read a great book this winter….read “The creature from Jekyll Island”. You’ll understand what I’m talking about.

  8. If you want to get serious about the debt, you also need to talk about taxes. Cuts alone will never get us to a balanced budget. But there’s not a mention here of raising taxes. Typical bullshit. Cut social security and Medicare—stick to the old and ill, but god forbid the upper middle class and the rich should be taxed. That would be unfair!

  9. Love the truth you tell John but as you say, no one has the will to do what’s needed because they couldn’t get bills passed and wouldn’t be elected in the first place. So maybe we should be concentrating on how to deal with the inevitable crisis that will come.

  10. The national debt has been deliberately created through tax cuts, wars, and recession. The Reagan, Bush, and Trump tax cuts were huge giveaways to their rich donors paid for with public debt. Debt exploded after each tax cut. In order to justify the tax cuts, a lie was developed that tax cuts create growth. It was called “Supply Side Economics”, or Reaganomics. Here is the truth: From 1865 to 1900, when there was no income tax, real GDP per capita growth averaged 1.75% per year (these were the laissez-faire, small government, low tax libertarian paradise years). From 1947 to 1981, when the top tax rate varied from 70% to 92%, real GDP per capita growth averaged 2.1% per year. Between 1981 and 2017, with a top tax rate from 28% to 50%, real GDP per capita growth averaged 1.7% per year. Lower tax rates did not create growth. Anyone who says they did is lying.
    The deficit in 2016 was $585 billion. Thanks to Trump’s tax cuts (another huge giveaway to the rich) and military spending the deficit is now about $1 trillion. Trump promised to pay off the national debt in 8 years. Instead, the national debt went from $20 trillion to $23 trillion is less than 3 years. I hope this is clear. When Republicans cut taxes, the rich get the money and the rest of us get the debt. Now Trump is cutting food stamps. This is a transference of money from the poorest to the richest.
    Back in the 70’s Republicans realized that it would be difficult to eliminate Social Security and Medicare because they are popular programs. So they devised a strategy called “Starve the Beast” where they cut taxes in order to create a financial crisis (or at least the appearance of one) that will force Social Security and Medicare to be cut. They want to scare us with the debt that they themselves created, exactly like John Stossel is doing here.
    If it wasn’t for all that tax cutting and military spending we could easily afford Social Security and Medicare, in addition to having a balanced budget. Don’t believe their lies!

  11. I’m a libertarian, but a pragmatic one. While I’m not opposed to companies moving offshore we have to balance free trade and freedom of enterprise with the obligations to repay people that have paid into their whole lives. We can’t do that without taxpayers. We can’t have taxpayers without jobs. I think a lot of the economic stimulus and momentum we’re experiencing is based on optimism we are reversing the last two plus decades of disastrous trade policies that eliminated entire sectors of our economy by sending them overseas. I don’t like the thought of regulation in principle but at some point you have to address reality.

    Another goal we need to have is reducing foreign aid and the overall military budget. There needs to be a dividend for us in exchange for protecting the world’s shipping lanes and free markets across the globe. These are things we could do that wouldn’t cause any pain or expense to our taxpayers and would ultimately help our balance sheet as well. I hope we don’t wait until it’s too late.

  12. Money is now worthless, so no one cares anymore. It could be 100 trillion in debt. MeAningless at this point. Your digits in your bank balance when you login online. Its just a number. When the dollar collapses, everyone’s number will be about the same give or take a few dimes.

  13. John….Two questions.

    First. Why do you and every other person choose to talk about Social Security as the “bad boy” when discussing entitlements? This is not an entitlement. Every non-government, non-pension receiving employee in America pays into the system from their first job to the time they retire and they receive a paltry sum in return. Those who receive pensions pay little, and in some cases ZERO, and receive much higher monthly income than the SS recipients who paid in. Social Security recipients deserve way more money + interest for all the years government “held” our money.

    Second…someone give me answer please. Why are we always told that Social Security, a system that is paid into, will “run out of money” at some future date in time, but we NEVER are told that the welfare system, which no one pays into, is ever going to run put of money?

  14. IF Congress had not stolen seven TRILLION dollars from Social Security (the largest Ponzi scheme ever to be perpetrated in this country) to fund welfare and other social programs, including welfare, free healthcare, free education etc ad nauseum for illegal non-citizens in the millions, SS would NOT be bankrupt! SO, they stole our money, without our consent, and put it in a fund which was never supposed to be touched nor taxed, but held in trust for us, and then they raided that fund for others, who don’t pay in and now bitch about what they OWE US! Screw ’em!

  15. …easy, please, would you?…live your life, manage your money and stop trying to use the government to take anybody else’s money away…it’s none of your business how much Joe or Jane makes, how much they save, how much or in which way they invest or how they might use their investments…IT’S THEIR MONEY, NOT YOURS…it’s disgusting to read in almost every comment suggestions of how somebody else’s money should be used…why don’t people live their own life and let others be?!…is everybody trying to implode with envy?…are we, Americans so low-life already that we start demanding from the President to guarantee us a job?…

    …also: everyone seems to want to ‘stop’ something…OK, let’s stop Johnson’s ‘Great Society’, the Welfare State…let’s stop ALL subsidies, ALL foreign aid, ALL wasteful, undeclared wars, ALL government growth (let’s put a limit by law, Constitutional amendment), ALL unbalanced budgets, both Federal and State, ALL lobbying, ALL re-elections (elected positions one time only)…let’s put an end to ‘fractional banking’ (FED and other ‘Central Banks’)…let’s close the borders and document everybody inside them…just for the start…

    …we would all be rich beyond any measure already, Ladies and Gentlemen…INSTEAD WE’RE DESPERATELY TRYING TO FOREVER LIVE AT THE EXPENSE OF EVERYBODY ELSE…

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