The Government of the United States of America has unanimously decided that there is no longer utility in the pretense, much less the actual application, of fiscal responsibility when conducting our nation’s business. The Democrats lost that religion many years ago and it is painfully clear that the Republicans have now joined in the chorus. There continues to be those rare occasions when, for the sake of political appearance, one Party will accuse the other Party of being profligate in its administration of federal tax dollars; but this so transparently insincere and hypocritical as to be ludicrous. Consider the following:
In fiscal year 2020, which ended September 30 of 2020, the U.S. Government collected $3.42 trillion in tax receipts. In that same fiscal year, the Government spent $6.55 trillion.
A useful way to frame this budgetary misadventure is to consider it in the context of Gross Domestic Product (GDP). The GDP is defined as follows: the total value of all goods and services produced domestically by a nation during a year. The GDP figure for America in FY20 was $20.93 trillion.
In 2014 (most recent I can find), our country had assets valued at $269.6 trillion, debts of $145.8 trillion, resulting in new worth of $123.8 trillion. A simple definition of net worth is the value of assets minus liabilities.
The average net worth of an American household is $692,100. A more meaningful figure, however, would be the median net worth of an American household; that number is $97,300. While the average net worth figure is skewed by the super-rich in our nation, the median represents a point precisely half-way between the highest net worth and the lowest net worth. A thoughtful comparison of the two figures, the average and the median, should lead to serious reflection not only on your own net worth, but on the financial condition of our nation and its people.
Theoretically, the higher the net worth, the more debt one should able to sustain. If you are an individual and you own a lot of valuable stuff, you can always sell off your stuff to pay your debt. You have collateral. When your stuff runs out and you are short on cash, you are officially in the hole. America has a lot of stuff. In fact, as previously stated, America’s stuff is valued at around $269.6 trillion. This means that unlike most of us, our Government has pretty much unlimited ability to acquire debt. Not only do they have a lot of stuff, but they also have a lot of income. That income last year was $3.42 trillion (tax receipts).
Now if the subject in this discussion is you or me, as long as our assets can cover our debts and our income can cover our debt service, we can stay above water. When our debt service (monthly payments) begins to outpace our income and the amount of our debt exceeds the value of our stuff, we are what is diplomatically called “insolvent”. Considering the value of America’s stuff, we as a nation have the capacity to carry a lot of debt. This means that we do not have to balance our federal budget every year. It is not unreasonable for us to spend more than we make because our net worth will cover us in the long term. On the other hand, the cost of debt (debt service) and the promises we make through our Government to our citizens (various entitlement programs, social security, Medicare, Medicaid, etc.), both present and future, is spiraling our national debt upwards. We as individuals refer to this phenomenon as “the interest is eating me alive”.
I believe it is fair to say that most Americans understand we are a rich and blessed country and that if we need to run a federal deficit to accomplish good things…we can live with that. On the other hand, the definition of good things is a very relative term and the fact is that no matter how much we might be worth, debt does not go away. Therefore, if our Government is going to continually exercise their practice of spending more than we take in on an annual basis and constantly makes new promises to future citizens for more federal spending, the debt service combined with the ever-increasing overall debt will continue to accumulate at an alarming rate and will ultimately pose a serious problem for future generations. Debt does not go away.
So…if it is acceptable for the Government to spend our current and future tax dollars on good things, as long as they are truly good things and as long as that spending is within reasonable limits…here, my friends, are the essential questions: What federal expenditure is a good thing? How much federal expenditure is within a reasonable limit? And perhaps the most important question of all…who should decide how much debt load and service we pass on to our children and grandchildren?
Let us increase our focus on this issue. Our nation was blindsided and seriously rocked by the coronavirus pandemic. There can be little doubt that this episode represented one of those times when our Government needed to perhaps spend more than necessary in order to cope with the adverse economic impacts of the catastrophe. In the spirit of the new political term “let no crisis go to waste”, both national parties jumped on board the relief ship and christened the burgeoning covid relief legislation known as The Coronavirus Aid, Relief, and Economic Security Act (CARES). For a good, concise summary of what was included in this bill, see this https://www.reedsmith.com/en/perspectives/2020/03/cares-act-overview . This Act cost more than $2 trillion.
Let us put the cost of the CARES Act in perspective. In 2009, America experienced what was called the “Great Recession”; the largest economic contraction in 80 years. The unemployment rate hit 10 percent and the stock market lost nearly 50 percent of its value. In response to this crisis, Congress and the President passed the American Recovery and Reinvestment Act of 2009, valued at $831 billion. The CARES Act, passed in March of 2021, is roughly twice the size of the 2009 bill, which was the largest stimulus act passed in this country since World War II.
Here is another perspective on the federal tax dollars spent through the Cares Act: https://www.heritage.org/budget-and-spending/commentary/how-big-the-covid-19-cares-act-relief-bill . Please keep in mind that we are now talking about trillions; not millions or billions. Trillions is the term we used when we were addressing the net worth of the entire country. The stakes have clearly been raised.
We stand here today, not six months since the passage of the CARES Act and are facing a political and financial crossroads. President Biden, his Administration, and the Democrats in Congress began this year with the vision of reinventing America through liberal legislation. The CARES Act was a gift to them inasmuch as the Republicans were far too timed and lacking in testosterone to offer any effective resistance to its capricious spending. Everything but the kitchen sink was thrown into the CARES Act. But the CARES Act did not even come close to satisfying the liberal appetite of the WDC Democrats; it was just the opening act (no pun intended).
Under the guise of infrastructure, the Democratic plan was to follow up the CARES Act with a multi-trillion dollar package of goodies and social policy that would pretty much satisfy even the most progressive liberal. However, at some point, it became obvious that in order to pull off this magical reshaping of our country, every single Democrat vote in Congress would be required. This was a problem because every single Democrat did not support this spendapalooza infrastructure bill and all the nonsense that was in it: https://www.azcentral.com/story/news/politics/arizona/2021/07/28/arizona-sen-kyrsten-sinema-wont-back-democrats-3-5-trillion-reconciliation-bill/5402193001/
So today we are looking at the reinvention package being split into two parts: infrastructure light (aka the bipartisan Senate bill) and infrastructure heavy (the real serious social stuff). After a few weeks of melodrama suitable for daytime TV soap opera, the infrastructure light bill is approaching a vote and appears to be valued at around $1 trillion. The infrastructure heavy package appears to be valued at around $3.5 trillion.
There are many theories as to why the Democrat’s wish list legislation is being split up. I will leave that speculation up to the professionals. For now, I would like to focus on the infrastructure light bill; it is the one on the plate set before us at this moment. There will plenty more to say about infrastructure heavy legislation at a later date. Here is the actual infrastructure light bill: https://www.epw.senate.gov/public/_cache/files/e/a/ea1eb2e4-56bd-45f1-a260-9d6ee951bc96/F8A7C77D69BE09151F210EB4DFE872CD.edw21a09.pdf
Read through this bill and think about how it will impact your community and your life. Here are some good articles about what is included in this so-called bipartisan Senate bill:
https://www.powerlineblog.com/archives/2021/07/some-dare-call-it-infrastructure.php
This bill will apparently use billions of dollars in unused funds that were authorized through the CARES Act to help finance it; perhaps up to 50 percent of the cost. That is a good idea. But wait a minute! I thought the CARES Act was emergency legislation that was needed immediately in order to help the nation survive and now you say there are billions of dollars in it that have not yet been spent? Back up the train. Perhaps we should spend what we already have available before we get about approving billions more?
There are some harsh truths that are becoming evident about our Government’s spending habits:
They (both Democrats and Republicans) have lost all understanding and relevance of zeros in the science of math.
They (both Democrats and Republicans) have lost all sense of shame when considering the irresponsible practice of chronic deficit spending.
The title that is placed on legislation has very little relationship to the actual content of the legislation. Every piece of legislation is another opportunity to throw funding at pet projects.
The Democrat Party is currently fully engaged in an effort to change the fundamental nature of our country as to its principles and structure. They are openly attempting to buy votes through the legislative process that will help to maintain their governmental control and thus enable that effort.
I know, I know….too many numbers and too much complaining. I am guilty. But I have to believe that a lot of folks see it like I do. Government please…..Stop throwing money around like it can solve all of our problems. It obviously does not work that way. Rein it in and show some maturity and restraint in your spending. Re-examine your priorities and direct our tax dollars towards our serious issues in a transparent and deliberate fashion. Grow up and stop acting like small children in the sandbox. That is not sand you are throwing around; it is real money. It is our tax dollars.
Pass
the Word!! …. Just Google centerlineright
While this drama of congressional fiscal insanity plays out, we are left with a shell of a President. Consider this video of Ronald Reagan at age 76 and compare it to the numerous clips that we see of Joe Biden mumbling and stumbling his way through the presidency: https://www.powerlineblog.com/archives/2021/07/slow-joe-vs-the-gipper.php . Can anyone honestly believe that Biden, age 78, could last 2 minutes with these journalists? America is bereft of leadership in the White House and in Congress. This tragedy is on open display for the entire world to view. These are truly dangerous times across the planet for America.
Within our borders, the lurking beast of inflation continues to prowl about in the shadows. Does anyone have any doubt whatsoever that this insane explosion in federal spending will do nothing but encourage the monster? How soon we forget; consider this: https://www.nationalreview.com/2021/07/most-americans-are-now-losing-to-inflation/
If your community is like mine, you can’t drive anywhere without being inundated with “Help Wanted” signs. Business inventories are starved due to supply chain bottlenecks that are caused by…yep, you guessed it…lack of employees. What did Congress think would happen when it pays more to stay home with government checks than it does to find a job and work? And now, with job openings all over the place, people are complaining because the Government will stop paying their rent? Really? Some states have figured this one out: https://www.nationalreview.com/corner/incentives-matter-mcdonalds-says/
No sane person expects to see a balanced federal budget in their lifetime. We just want to see some semblance of common sense in federal spending. That ain’t Monopoly money you’re playing with and that kinda looks like what you think.
We do not expect the coronavirus to be extinguished from the face of the earth. We just want to see clarity in reporting, leadership and common sense in mitigation, and the ability to say “we don’t know” when all the answers are not available. We have to learn to live with it.
We have elected a mentally and physically challenged old man as our President and he is clearly not up to the job. He is not just a fool; he is an old fool. We get the government we deserve and we are stuck with him for the rest of his term. Just stay in the house, do as little damage as possible, stop telling everyone lies about playing college football and driving 18-wheelers, and try to bring the country together instead of ripping it apart with your partisanship. And by the way…stop filling up our government with radical idiots.
Through hard fought national elections, the Democrats have won control of the Congressional and Executive Branches of government. But don’t take an historically-narrow Presidential victory, an evenly-balanced Senate, and a razor-thin House majority…pretend that this represents some kind of national mandate…and then try to change the fundamental nature of our nation. You have won the right to tilt the balance of governmental policy to the left; marginally to the left.
Although he himself is having difficulty accepting it; Donald Trump is no longer President. You…Joe Biden and the Democrats…are apparently having trouble accepting it also. Quit blaming everything that goes wrong on Trump and taking credit for everything that goes right. You have been in office for about six months now and it is past time to step up and be accountable for leading this country. Get some therapy for your Trump Derangement Syndrome, promote your policies through sincere and transparent methods, and get about the business of healing this tortured nation.
Hey...let's just forget all this noise and listen to the Floyd Boys: https://www.youtube.com/watch?v=-0kcet4aPpQ
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