Do you think most Americans would agree that spending more than you have coming in every month, every year, year after year is a bad idea? Is that how you ideally run your household? Do you regularly, month after month, year after year, continue to add to your debt? Do you finance the interest on your debt by adding more debt, and do that every year, year after year? It would seem likely that most Americans can agree, this is not a good idea. This is not the ideal way to run your household. This is not how you get ahead. To the contrary, eventually, when reckoning comes, it will be very, very bad for you and your future.
Generally, we believe most Americans operate under what is known as a “budget.” If you’re unfamiliar with the term, seek help, perhaps from Merriam-Webster. Fiscal responsibility calls for calculating what you have coming in (i.e., earnings, income, proceeds, profits, etc.) and comparing that to what goes out (i.e., costs, expenses, fees, dues, etc.). Now, most Americans also understand the key part of fiscal responsibility is that “coming in” needs to be equal to or greater than “going out.” In other words, you need more money coming in than money going out. If money going out is greater than money coming in, you have two relatively simple choices – increase income or decrease spending. Or some combination of both. It is that simple. And we all know it. Sometimes impulses get the best of us. Sometimes we have emergencies. Sometimes we just need to splurge. But not every month, not month after month, not all the time. If we did, eventually it’s bankruptcy, repossession, foreclosure … no credit, limited ability to own and spend … years on fiscal probation. It’s a devastating outcome.
Can most Americans agree on the foregoing? Does any American out there disagree? Seems like we are on solid agreeable ground here. Yet, it seems that our elected officials in government don’t quite understand this. Let’s focus on the federal government for the time being. Our federal government in Washington, D.C. just keeps spending, year after year. It doesn’t matter who is in control, it doesn’t matter who was elected, it doesn’t matter which party controls Congress … our federal government reliably overspends every month, every year, year after year after year … there is so much blame to go around, it’s truly frightening.
However, what is even more troubling and more frightening, is that it appears a vast portion of the people of the United States just don’t seem to truly care. If you ask, most people will quickly agree, “yes, government spending is out of control.” “Yes, we need to balance the federal budget.” “Yes, the national debt is outrageous.” “Yes, it’s a real problem we need to do something about.” But then what? Election after election, we just keep putting big spenders in office. We shrug at pork-barrel earmarks and just move along like that’s just the way it is. We accept continually increased spending. We complain at the thought of more taxes, we bristle at this cut in spending or that cut in spending. Many people react with dismay and disbelief that shutting down the federal government is a solution, and others cheer the idea as the only viable solution. Every time there’s a congressional debate about raising the federal spending/debt limit, there’s an associated ruckus among the various talking heads in the media, people scream “they can’t do that” or “they must do that,” Congress agrees to spend more at the last minute, and we all move on to the next existential crisis of the week.
Do Americans really not care? As discussed above, we all know this is problematic. Is it just too much to tackle? Are there no workable solutions? How do we avoid the single biggest problem facing the future of this country? Wait – did the people at Only America just try to tell me that the burgeoning federal debt is the single biggest problem facing the country? What about foreign threats? What about government impingement on personal freedoms? What about crime and policing? What about national security? What about energy resource management? What about immigration control and reform? These are all real problems, and they are all important, and they all must be addressed. And none of them can be fixed if the United States of America has no money, no credit and can’t fund its most basic services. So, yeah, our federal debt is our biggest problem. Maybe we here at Only America are looking too far ahead, but like most things, real trouble sneaks up on you real quick and in a hurry.
Well, but it’s so simple, just stop spending more than we take in. Done, and done. Fixed, right? Alas … if only …
About a year ago, the New York Times published a story that contained economic information provided by the Committee for a Responsible Federal Budget (www.crfb.org), a reasonably non-partisan organization[1] that pushes for some sense of fiscal responsibility, in which they bluntly explained (with interactive graphs as well) the harsh reality of balancing our federal budget.[2] If we do not raise taxes (which is an entire separate discussion itself), but rather hold them constant for the sake of mathematical comparison, and we exclude budget cuts to defense, Medicare and Social Security, in order to balance the federal budget, the remaining federal expenditures would need to be cut by 70%. Almost three quarters of all other spending would need to be cut. That includes education, transportation, anti-poverty programs, foreign aid, veterans’ programs, agriculture, and more. And, this does not even address interest payments! According to the U.S. Treasury, we will spend over $520 billion servicing the national debt in the fiscal year 2024.[3] That is over 16% of all federal spending.
70% is a massive cut. And most, if not all, Americans would be troubled by such cuts in one way or another. Some would say, we can’t cut this in favor of that, or vice versa. But let’s back up. Why does the discussion start with, “if we hold taxes constant and don’t cut defense, Medicare and Social Security, then …”? Is the former option a non-starter, are the latter expenses untouchable, sacred cows?
To be clear, cards on the tables, we here at Only America are vehemently opposed to decreasing the defense capabilities of the United States of America. We are proponents of Teddy Roosevelt’s “speak softly and carry a big stick” policy. We believe that to secure peace, we must prepare for war. There is safety in deterrence. That said, government waste runs deep, and the waste at the Pentagon and within the Department of Defense is epic. But we all know this. No one thinks otherwise. But making cuts is still incredibly difficult.
In the most simplistic terms, imagine the Department of Defense is a parent protecting its child (the country) from injury (attack) at the playground (the world). The parent gets a fence put up around the child’s area of the playground, and he or she puts padding in certain areas, and makes the child were safety gear, and then puts up sensors to alert him or her of impending injury, and so forth. If the parent removes one of those measures and the child gets injured, will anyone ever accept the injury was inevitable and not blame the removal of one safety measure? Now imagine it’s a devastating, mass-casualty attack on the United States after a defense budget cut. Who decides where that budgetary cut gets made? Who will be willing to make that cut?
What about the other untouchable, sacred cows? Social Security and Medicare. It’s no secret, our Social Security system is running out of funds, and its borrowing authority will eventually expire. Some won’t say so out loud, but not many will deny the impending shortfall. Even the Social Security Administration itself, including its Chief Actuary, have long acknowledged its eventual shortcoming.[4][5] Social Security and Medicare will run out of money at some point between now and 2030-something-ish, if nothing changes. Some might say these programs are unfunded/underfunded as is, present day, considering their “trust funds” are really only authorizations to borrow.[6] Others seem to think a multitude of viable fixes exist, or we simply need Congress to take some action to fix the impending shortfall.[7][8]
But is it that easy? Is it as simple as raising retirement age from 67 to 70, and decreasing benefits just a bit? Will that fix everything? Is everyone going to be okay with that? Is the 64-year-old American who has been paying into Social Security for 45 years and who is expecting a certain amount every month going to be okay with less, and working six more years instead of three? Is it even really that simple? No, it’s not that simple according to the Social Security Administration.[9] Factors such as birth rate, life expectancy and others need to be considered, and inflation, income, earnings, and workforce participation all matter. Considering the impact of Medicare on the overall equation, the cost of healthcare and societal expectations in that regard will have a major impact as well.
But let’s get back to general sensibility. Social Security and Medicare, retirement and health, are generally considered universally important by Americans. What about simple waste? How much of our debt problem is just government waste? Well, that depends on what you consider wasteful. To be sure, there is no shortage of questionable spending by our government, and plenty of organizations track and report that wasteful spending.[10] Even more entities and people opine on wasteful government spending.[11][12][13] Even the federal government itself knows it wastes money, and its own investigative organization, the Government Accountability Office (GAO), points it out![14] Now, to be clear, having the GAO point out government waste is kind of like having Henry Hill tell Jimmy Conway he’s stealing too much, or … the pot calling the kettle black. The GAO is, in part, just more bureaucracy. The GAO, which has its own Inspector General, once issued a report on the 57 Inspector Generals within the federal government,[15] but rest assured, the GAO Inspector General is charged with investigating fraud, waste, and mismanagement by GAO employees.[16] Feel better now?
So, with all this “noise,” how do we decide what’s wasteful and what’s not? What is the equitable solution? What’s fair? What’s safe? What can we do? Do we just cut everything across the board? Does every government department, bureau, and organization have its budget cut by 10%? 15%? 25%? Do we increase taxes? For whom, and by how much? Do we just ignore it and say, “hey, as long as we’re covering the interest and we keep going, who cares?”
Do we owe it to ourselves and our children to be more circumspect in our cost-cutting measures than simply cutting everything across the board? Will any elected politician truly ever take action? Can we ever agree on what gets cut and what doesn’t? Maybe, maybe not. But one thing is for certain, we better all come to our senses and recognize the severity of the problem, and make it an issue for every branch, every agency, and every elected official. And we had better find some politicians to elect that will impose some fiscal sanity in ALL aspects of government. Do you disagree? Are we here at Only America making a mountain out of a molehill? We don’t think so, but tell us why you do?
If you agree, how do we get there? How do we stop out of control government spending? We have some thoughts … more to come. Stay tuned … and thank you for reading.
[1] We here at Only America say “reasonably non-partisan” in part due to the organization’s self-proclaimed approach, its relatively bi-partisan staffing, and it’s blend of staff backgrounds and demographics, but also acknowledging that many of its staff are D.C. insiders, career politicians and former purveyors of pork-barrel projects. Nonetheless, the organization makes efforts at promoting fiscal responsibility and they favor balancing the budget.
[2] Parlapiano, A., et al., “The Programs You’d Have to Cut … .” The New York Times, March 6, 2023. (https://www.nytimes.com/interactive/2023/03/06/upshot/balancing-budget-painful-spending-cuts.html, Accessed April 17, 2024)
[3] https://fiscaldata.treasury.gov/americas-finance-guide/national-debt/
[4] Wise, D., et al., Social Security Bulletin, Vol. 69, No. 4, 2009. (https://www.ssa.gov/policy/docs/ssb/v69n4/v69n4p65.html Accessed April 17, 2024).
[5] Goss, S. Social Security Bulletin, Vol. 70, No. 3, 2010. (https://www.ssa.gov/policy/docs/ssb/v70n3/v70n3p111.html Accessed April 17, 2024)
[6] Boccia, R., “The Unsustainable Burdens Imposed by the So-Called Medicare and Social Security Trust Funds.” Cato at Liberty, April 23, 2023. (https://www.cato.org/blog/unsustainable-burdens-posed-so-called-medicare-social-security-trust-funds Accessed April 17, 2024).
[7] Perfas, S., “Social Security, Medicare Far From Doomed, Policy Expert Says.” Harvard Gazette, March 21, 2023. (https://news.harvard.edu/gazette/story/2023/03/are-social-security-medicare-sustainable/ Accessed April 17, 2023).
[8] Paul, T., “Will Social Security Run Out of Money? Here’s What Could Happen To Your Benefits If Congress Doesn’t Act.” CNBC Select July 30, 2023. (https://www.cnbc.com/select/will-social-security-run-out-heres-what-you-need-to-know/ Accessed April 17, 2024).
[9] See, supra at E.N. 4 and E.N. 5.
[10] https://www.cagw.org/ & https://americansforprosperity.org/
[11] Winegarden, W., “Wasteful Spending By Other Names.” Forbes, December 19, 2016 (https://www.forbes.com/sites/econostats/2016/12/19/wasteful-spending-by-other-names/?sh=42b4e52c6569 Accessed April 17, 2024).
[12] Andrzejewski, A., “Wasteful Government Spending Programs.” C-SPAN Washington Journal July 25, 2023 (https://www.c-span.org/video/?529485-3/adam-andrzejewski-wasteful-government-spending-programs Accessed April 17, 2024)
[13] Lee, J., “The Federal Government Wastes At Least $247 Billion in Taxpayer Money Each Year. Here’s How.” CNBC April 18, 2023. (https://www.cnbc.com/2023/04/18/heres-how-the-federal-government-wastes-tax-money.html Accessed April 17, 2024).
[14] U.S. Government Accountability Office, “Where can government save money?” GAO Watchblog May 11, 2022. (https://www.gao.gov/blog/where-can-government-save-money-weve-found-more-half-trillion-dollars-potential-savings Accessed April 17, 2024).