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America: Don't expect Republicans to address national debt
If you seriously think that the government will shut down for any extended period of time and the result would be a balanced budget or a more reasona ...
 
Wednesday, December 12, 2018
by Donald Wittmer
 

If you seriously think that the government will shut down for any extended period of time and the result would be a balanced budget or a more reasonable approach to our spending situation, then I want to tell you that Santa Claus is not coming down your chimney this Christmas. The whole situation is a hoax. Our Congress will pass the “spending authorizations” again and again since they do not and never have had a balanced budget. People, the Congressional salaries and expense accounts are in jeopardy. They are part of the spending bills necessary to keep our debt ridden government alive. Issues like funding the border wall will come up and eventually be resolved but the real question is how much debt can we live with and where will the debt dollars be spent.

We argue where the money the government doesn’t have will be spent. House-Senate negotiators have already agreed to fund $1.6 billion dollars for border security but President Trump wants $5 billion. If no deal is reached by December 21st, then we would have a “partial government shutdown” as our Congress has already approved a big chunk of the 2019 spending bills. Our deficit will rise to $1 trillion dollars in 2019 and the GOP tax cuts and omnibus spending bills are responsible. Red ink is flowing everywhere. The government will borrow $0.19 cents of every dollar it spends. Deficits will grow to $1.5 trillion dollars by 2028 and will exceed $2 trillion if Washington doesn’t cut spending.

Many economists believe that if deficits continue to rise and the National Debt grows, government borrowing will “crowd out” private lending and force up interest rates. The result will be that it will cost the government much more to finance the $21 trillion dollars in Treasury debt held by investors and foreign governments.

In fiscal year 2019, the federal budget will be $4.407 trillion dollars. The U.S. government estimates that it will take in $3.422 trillion in revenue. This creates a $985 billion dollar deficit for October 1, 2018 through September 30, 2019. Interest on the U.S. debt keeps rising. It is currently running $363 billion but with the global economy improving, Treasury yields are rising and interest on the debt is already the fastest growing federal expense.

Curbing spending is the only way to control our deficits and ballooning debt.  Without some form of action now, we run the risk of an unstoppable debt spiral and the possibility of default on our existing debt is a real possibility. Regardless of whether we look at mandatory spending or discretionary spending, more dollars are going out at an accelerating rate than ever before. The tax cuts of 2017 were a generous effort to stimulate our economy but they are being financed by 100% debt. The future of Social Security and Medicare are at risk. Both programs face a future of paying out less than they take in. It is only a matter of time. Our government does not seem anxious to face this issue but an increase in taxes to fund both programs may be necessary very soon.

Our Congress will no doubt pass some form of a continuing resolution or temporary spending resolution to keep our government running before it shuts down but the bottom line is still the same. We are living on debt; we continue to increase this debt; and, we have absolutely no plan to stop the mounting debt or solve the long term problem.

Donald Wittmer writes for Catholic Journal.




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