The budgetary elephant in the room

From the early 1970s to the end of the 20th century, one of the major political issues in the United States was the national debt. The issue gained special notice when the number first surpassed a trillion dollars after nearly doubling during the Carter administration and then continuing to rise during Ronald Reagan’s presidency. Reagan was a natural fiscal conservative who was hamstrung by his determination to win the Cold War through defense spending and a Congress hostile to his desire to cut domestic spending. Though Reagan’s tax cuts are often blamed for the continued yearly deficits, the reality is that revenues grew. The problem was spending.

The end of the Cold War, however, offered a respite. The United States was able to reduce military spending and realize a sort of peace dividend. Thanks to a combination of President Bill Clinton’s fiscal policy and the restraint imposed by a Republican Congress beginning in 1994, the government did what seemed impossible and produced a surplus rather than a deficit from 1998 to 2001. The United States, it appeared, would actually begin to pay down its national debt and achieve a level of fiscal discipline that would only cement its post–Cold War dominance.

What has happened since then can only be characterized as a fiscal disaster. The shocks of 9/11, the wars in the Middle East, the financial crisis of 2008, and the nation’s response to COVID-19 radically changed the budget picture. Since that last surplus in 2001, the United States has become a nation with a spiraling yearly deficit. It has exceeded a trillion dollars in most years since 2008, when Barack Obama was elected president, and then through the Trump and Biden administrations. Demographic trends work against us as we appear to have lost all budget discipline. Social Security and Medicare recipients have grown as a population while U.S. birth rates have declined. That means there are relatively few workers to support a very large body of beneficiaries.

Despite this growing crisis—the debt has increased by more than $7 trillion during Joe Biden’s single term alone—and nobody seems to be talking about it. We are in a presidential campaign, but the national debt doesn’t even appear to be a voting issue. Neither Vice President Kamala Harris nor former President Donald Trump proposes a plan for getting the yearly budget under control, much less making any progress on the overall debt. We are now spending more on interest each year than on national defense. Only Social Security and Medicare exceed spending on interest to service the debt. All of us realize, or should realize, that interest on the debt will work against us the same way compound interest benefits the saver.

The Republican Party once campaigned on a platform of cutting government spending and paying down the national debt. To be fair, Democrats of a certain stripe attacked the problem from a different position, which was proposing to raise taxes to generate more budget dollars. Neither side has a plan today. Neither is talking to voters in a sober, pragmatic way about what must be done to put our fiscal house in order. It appears that we are trapped in a kind of mutual fantasy in which we pretend the elephant in the room does not exist and is not likely to start stomping about crushing whatever is in its path. We are being treated like children who can’t know about the problems Mom and Dad are having. Instead, we listen to endless debates in which the two sides seek to convince us of how stupid or monstrous their opponent is.

We live in an age in which there is a near-constant dialogue about justice. Criminal justice, social justice, environmental justice, immigration justice, etc. We are all eager to bootstrap the noble and urgent call for justice to ramp up the narrative power of our priorities. One form of justice that has gone sadly neglected is generational justice. Through our irresponsible budget practices, printing of money, massive interest charges, and lost purchasing power we are leaving the generations who come after us in a greatly hampered position. They are like a couple who enters a restaurant at the end of the evening and are presented with the bill for all the parties that ate at the same table before them. It isn’t right. Mature and caring people would not countenance such a challenge to be laid at the feet of their children and grandchildren.

One of the most fundamental tasks of any government is that it maintains a solid fiscal foundation upon which a future can be built. It’s time for America’s political class to stop pretending budgetary limits don’t matter.