“The national debt has passed a new milestone, topping $22 trillion for the first time,” reported the Associated Press. “The Treasury Department’s daily statement showed Tuesday that total outstanding public debt stands at $22.01 trillion. It stood at $19.95 trillion when President Donald Trump took office on Jan. 20, 2017.”
“It looks like a $9 trillion time bomb is ready to detonate, a corporate debt load that has escalated thanks to easy borrowing terms and a seemingly endless thirst from investors,” CNBC reported.
“For the first time ever, consumer credit has risen above $4 trillion,” said news accounts citing a Federal Reserve release. Since 2013 there has been a $1 trillion increase in the amount of debt Americans are carrying.
“Student loan debt in the U.S. more than doubled in the past 10 years, hitting an all-time high of $1.36 trillion in the third quarter of 2018,” according to consumer credit reporting agency Experian.
All these debt bubbles pose high risk for another economic meltdown. The NY Times quoted 76-year-old influential fund manager Jim Rogers predicting a crash that will be “the biggest in my lifetime.”
Shhh. All these peak debt levels have occurred with Republicans in control of the Congress and White House.
No surprise really. Take the national debt. Republicans like to talk “eliminate the deficit” and “reduce the debt” and “balance the budget,” but since George H.W. Bush was president have never followed through with the walk. It’s really the height of hypocrisy these days when they talk down Democrats about spending and deficits.
Remember Donald Trump’s campaign promise to eliminate the debt? In a March 31, 2016, interview with the Washington Post, he promised to eliminate $19 trillion in debt in eight years. Instead it has gone up $3 trillion.
Rising interest rates and escalating debt are a formula for economic turmoil if not collapse. Debt watchdog, the Peter G. Peterson Foundation, reported in December that interest on the national debt “will nearly triple over the next 10 years, soaring from $315 billion in 2018 to $914 billion in 2028.” Soon interest payments alone with top $1 trillion annually.
“Unless we make the hard decisions to close the structural imbalance between spending and revenues, federal debt will climb to unsustainable levels and put America’s economy and future prosperity at risk,” the foundation declared.
Those decisions include uncomfortable spending cuts matched with undesirable tax increases. As we learned from the failed Obama-Boehner “grand bargain” that followed the failed Simson-Bowles plan, such decisions will not happen. The politics are too tough for our elected officials. Republicans can only cut taxes, not raise them, and Democrats can only increase spending, not cut it.
Sigh. As Pogo told us, “we have met the enemy and he is us.”
P.S. Mississippi is not immune to the debt dilemma. State financial reports show our public debt continues to grow. The two largest components, bonds and notes payable at $5.6 billion and the PERS unfunded pension liability at $16.9 billion, total $22.5 billion. That’s up from $19.7 billion in 2012.
Shhh. This occurred, too, with Republicans in control of the Legislature and Governor’s Mansion.
Care about this stuff? Download former Sen. Tom Coburn’s deficit reduction plan: https://www.hsdl.org/?view&did=682791, or the Simpson-Bowles plan: https://www.srainternational.org/sites/default/files/documents/Fiscal%20Commission%20-%20Moment%20of%20Truth.pdf
» BILL CRAWFORD is a syndicate columnist from Meridian.
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