Cal Thomas: Government spending and the debt

MYRNA BROWN, HOST: Today is Thursday, May 16th. Good morning! This is The World and Everything in It from listener-supported WORLD Radio. I’m Myrna Brown.

MARY REICHARD, HOST: And I’m Mary Reichard. Up next: WORLD commentator Cal Thomas on solving America’s debt crisis.

CAL THOMAS: Many people have made money by following the advice of Berkshire Hathaway CEO Warren Buffett. His recommendations about which stocks to buy, which to sell and where to invest have earned him the title “Oracle of Omaha.” I prefer a modern cultural version: “the Taylor Swift of Capitalism.”

Recently, Buffett predicted the government will have to raise taxes if America’s massive $34 trillion debt is to be reduced. He said nothing about cutting spending which remains the real problem. It does not take an economist to conclude that Buffett has it backwards.

The Committee for a Responsible Federal Budget said this month: “In the first seven months of Fiscal Year 2024, spending on net interest has reached $514 billion, surpassing spending on both national defense…and Medicare....Spending on interest is also more than all the money spent this year on veterans, education, and transportation combined.”

Does anyone believe that allowing the Trump tax cuts to expire at the end of next year will help? Everyone knows the main drivers of the debt are Social Security and Medicare. Few politicians want to touch this “third rail” because they fear they may lose their precious seats in Congress or be defeated in a presidential race.

The Peter G. Peterson Foundation notes, “Rising debt reduces business investment and slows economic growth. It also increases expectations of higher rates of inflation and erosion of confidence in the U.S. dollar.”

This should be beyond debate, but we can’t get a real debate on the economy because so many people rely on government to do for them what they mostly once did for themselves. By that, I mean save and invest wisely, live within your means, be responsible for yourself, and if you must look to government for help, make it last on your list, not first.

The Congressional Budget Office has forecast a rise in federal deficits to 8.5 percent of GDP in fiscal 2054 from today’s 5.5 percent. Remember, that’s only deficits, not debt. Deficits are added to the debt. When politicians claim to have reduced the deficit, they’re usually doing nothing to reduce the debt.

I have previously argued for the necessity of a complete audit of the Federal government. Members of an audit committee could be appointed by Democrats and Republicans. They would have to be nonpartisan and serious about the task assigned to them. This is what the Defense Department’s Base Realignment and Closure Commission did in 1988. Some politicians howled as outdated bases in their districts were closed, but it worked and saved money.

A similar approach could also work for the national debt. The last thing we need is for the productive citizens to be taxed at greater rates so that politicians can continue to misspend the money.

A true prophet must be right 100 percent of the time. Warren Buffett is right most of the time, but he is no prophet because he thinks we can ignore spending cuts and still solve our economic crisis.

I’m Cal Thomas.

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