The deficit and debt are NOW a problem? C’mon!

 

Bill Knight column for 11-5, 6 or 7, 2020

 Dismissing their record of advocating for massive tax cuts that will saddle the country with enormous debt, Senate Republicans have signaled that budget deficits and the national debt will once more be a priority in coming months. GOP stalwarts including Sens. Ted Cruz of Texas, Josh Hawley of Missouri, Ben Sasse of Nebraska and Patrick Toomey of Pennsylvania were fine with the 2017 Tax Cuts and Jobs Act, but now are worried about spending when it comes to helping everyday Americans suffering consequences from the COVID-19 pandemic.

In the House, a similar but bipartisan approach is emerging, as incumbent Illinois Congressmen Darin LaHood (R-Peoria) and Dan Lipinski (D-Oak Lawn) co-wrote an appeal to control the federal debt. They acknowledged the need for aid during the pandemic – some $3 trillion already, adding to the overall debt of about $17 trillion – but they added, “We must act now to ensure that as soon as these crises are over, we put our country on a fiscally sustainable path.”

They suggest a yearly report from the Government Accountability Office (GAO) on the nation’s finances, a bipartisan commission on Capitol Hill to work on actions concerning government trusts (including Social Security, Medicare and Highway), and setting debt-to-Gross Domestic Product (GDP) “targets” to cut spending.

As of August 31, the national debt was $20.83 trillion, and in September, the Congressional Budget Office said the government next year will run the biggest budget deficit as a share of the economy since the end of World War II.

(To clarify, the “budget deficit” refers to the annual difference between what the federal government collects in taxes and what it spends. The “government debt” means the accumulation of all those debts.)

Lipinski and LaHood were 2 of 58 Representatives (half Republicans, half Democrats) who signed a letter to House leaders asking for the three steps for transparency, a new way for Congress to be responsible, and setting goals to be more accountable.

As my late mom would say, “Oh, come ON!”

The aforementioned 2017 tax cuts will cost the government at least $1.5 trillion and were supposed to benefit all taxpayers. (Another Mom standard: “Yeah, RIGHT!”) That sum could balloon to $2.3 trillion if Congress extends the individual cuts (which are set to expire in 2025, unlike the permanent corporate breaks), according to the U.S. Treasury Dept.

“They put $2 trillion onto the national debt to give a tax break to the wealthy – 83% of the benefits to the 1%,” said House Speaker Nancy Pelosi.

At least Lipinski, a lame-duck Congressman after his loss to Marie Newman in this year’s primary, opposed the 2017 tax cuts.

Supporters of those cuts promote “trickle-down,” supply-side economics, the theory that enriching the wealthy and businesses will translate to economic growth eventually benefiting everyone else. That’s unlike the classic Keynesian approach, which holds that the U.S. economy depends on consumer spending that benefits from government investment in infrastructure, education and help for the jobless.

This summer, U.S. economy expert Kimberly Amadeo from The Balance financial newsletter said the 2017 tax cuts’ “increase to the debt means that formerly budget-conscious Republicans have done an about-face.”

Now they’re back-tracking.

Plus, elected representatives love bringing home the bacon, so concerns about spending often are overshadowed if states or districts benefit. (LaHood promoted $800,000 in pandemic relief to his district – money needed, but one wonders how a debt-to-GDP limit would’ve affected the assistance.)

Debt-to-GDP already was getting huge last year, “increasing to 79%, primarily due to the 2017 tax cuts,” said CBS News’ business analyst Jill Schlesinger, a Certified Financial Planner.

Granted, $20.83 trillion is hard to fathom. It would require someone making $10 million A DAY since the time when human beings first started writing (circa 3500 BC – 5520 years ago, or 2,014,800 days). But Robin Harding in the Financial Times commented that debt isn’t an issue as long as the long-term economy grows faster than interest rates. And Yahoo Finance reporter Myles Udland in Business Insider said debt is a problem only if it can’t be repaid (or if others think you can’t), and the United States literally can print the money it needs to repay debt and still has a high credit rating.

So new-found or re-discovered concerns are political grandstanding.

Stuart Stevens, a longtime GOP political consultant and author of “It Was All a Lie: How the Republican Party Became Donald Trump,” said, “How to you abandon deeply held beliefs about character, personal responsibility, foreign policy and the national debt in a matter of months? You don’t. The obvious answer is those beliefs weren’t deeply held.”