Did you know the US federal debt has increased by more trillions than years Obama has flounced in office? Over nine trillion dollars more in eight years will be the results when Barry finally hits the lecture circuit. I imagine every one of his let me be clear orations will be a bargain in comparison. Some men are worth paying every penny to stay out of politics. And even though The Economy is lower than Erick Erickson’s jowl pouch on my list of existential Western concerns, it’s still relevant to discuss periodically. Particularly its role in politics and potential for socially sub-optimal results.
One of my favorite perches from which to watch the fiscal sunset is US debt clock. There’s a lot of philosophical insight to be found in those spinning red numbers. When the Bush family’s dullest son (himself hardly frugal) left office in early 2009, the federal debt was just north of $10 trillion. Today it is–if you read this quickly–$19.7 trillion.
Such numbers are mostly like the Greek Gods–set high upon Olympus with little bearing on the lives of mortals. And that’s why debt/deficit talk has come to carry such little rhetorical weight. So some unfathomable number is larger than some previous other unfathomable number. What’s that mean to me?
What it means is that no one is feeling the pain of their country’s injury. Debt is a political analgesic. It masks unpleasant realities. If a wife is in a nice house, swank country club, and the front seat of a Mercedes, she will probably not ask many questions about her husband’s crushing line of credit. This is the opiate of choice for modern politicians.
Imagine the state of affairs if Obama had only ballooned the debt at the same rate of his profligate predecessor: $5 trillion. That’s $5 trillion the government wouldn’t have spent in the last eight years. Which is the equivalent of zero federal outlays for a year and a half of his administration. The result: anarchy, bloodshed, or revolution. Debt is how politicians now keep the car running. And its appetite for fuel grows voracious. It does not matter who is elected in November. If America remains as presently constituted and does not default, the debt will be $40 trillion in eight years. So what’s that mean to me?
First, consider what regular people would imagine as the purpose of government. Probably police, schools, fire departments, or interstates. None of these have any material bearing on federal finances. The top six budget items descending are: Medicare/Medicaid, social security, war, welfare, interest on the debt, and federal pensions. Or more simply: gibs, guns, and banks.
What becomes daunting to realize is that these six items alone represent a greater amount than the total of federal tax revenue. Which means the entire agency archipelago outside these areas is financed exclusively through borrowing. Aside from bombing the Middle East, there’s fascinatingly few government functions subsidized legitimately. So what’s that mean to me?
Look at that fifth budget item: interest on the debt, presently at $249 billion/year. This may seem substantial, but it is nothing to the resources future line items will consume. The average interest rate carry is currently 2.2 percent. This is historically low. A doubling of the figure would remain historically low. A tripling to 6.6% would be nothing at all outside the normal range. That’s three-quarters of a trillion annually. Double the debt and you are to $1.5 trillion in annual service, which is nearly half current tax receipts.
Which means eventually you’re doing nothing but owing money to the money you owe.
None of which matters to politicians, who are as equally inclined to drop fiscal disasters on our posterity as they are demographic ones. And we, the dizzy domestic housewives, are just happy the country club dues are getting paid.
Though the point of all this esoterica is not to elevate numbers over real human issues. But rather to understand that none of our social priorities exist beyond future consequence. We may believe morality dictates we fund a global military presence on every border but our own, welfare for the world’s indigent, and a lavish raft of entitlements for every squalling squatter and “minority” that is American on the inside.
We may think these and many other gestures of virtue are the costs of liberal grace. If so, they are ones beyond our capacity to bear. Moral preening has never been cheap. So we borrow. And the pain of our limitations is passed to another day. But when that day arrives, you (and your children) will work for months each year to only pay interest on past indulgences. The vanishing pool of discretionary expenditures will be ferociously contested by the multiplying people of color factions. Your concerns will be immaterial. Public services and infrastructure will grow decrepit and your “fair share” of the tax bill will relentlessly increase.
Pay more, get nothing. That’s what it means to you.