As the Debt Ceiling Rises Again, What Example is the Government Setting for our Kids?
Imagine if you had a special printer in your house to bail you out anytime you needed to buy something. A new Corvette? No problem. A bigger house? A vacation in Tahiti? College for the kids? No problem. Just mosey on over to that special printer and print the money. How do you activate the printer? Just click “yes” when it asks if you’ll pay it back with interest. And how do you pay back the interest? Just keep saying yes and keep printing more money.
That’s pretty much, in a nutshell, the story of our federal government and its relationship to money.
When you hear politicians promise the world in order to get your vote, what they never tell you is that the government doesn’t really have the money. They need to borrow. They need to go deeper into debt and print more money, something the U.S. has become very good at.
Evidently, the taxes our government collects can’t cover the promises they make. Who knew?
The drama we’re witnessing now in D.C. is familiar: The government has hit its debt ceiling! If Congress doesn’t take immediate action, the country won’t be able to pay its bills! Will the parties put politics aside and raise that damn ceiling already?
What the headlines don’t tell you, however, is that Congress has raised its debt ceiling more than 80 times since the 1960s. Chronic borrowing, in other words, has become as American as football and apple pie. And if interest payments run out of control? No problem: just borrow more money to pay for the costs of borrowing.
To give you an idea of our spending addiction, over the past 100 years, the U.S. federal debt has increased from $40 billion in 1922 to $30.93 trillion in 2022. As a percent of GDP, our debt went from 30 percent in 1980 to 124 percent in 2022.
How much does it cost to service this debt? As of December 2022, it came out to $210 billion, about 15% of total federal spending. One shudders to think what we could have done with this $210 billion. Improve education? Fight homelessness? Alleviate poverty?
The problem is that these inconvenient truths rarely come up in our national conversation, and for good reason. Who wants to talk about the huge price we pay for our out-of-control borrowing? Certainly not our politicians. They assume the only way they’ll get our vote is to keep offering us more and more “free stuff.” They can never remind us that this stuff is not really free. They figure, probably correctly, that a responsible message of belt-tightening will probably land them on an unemployment line.
Meanwhile, among the intelligentsia, there’s a school of thought that downplays the danger of ballooning debt, especially when interest rates are low. But that argument, obviously, can only go so far. And don’t get me started about special interests and the huge lobby industry. Just like politicians who don’t have skin in the game, lobbyists never have to worry that a federal debt will touch their pocket books.
Who does have skin in the game? The taxpayers, of course. Anything that hurts our economy ends up hurting us, because we end up paying for all this stuff.
Indeed, it’s naïve to think we can get away indefinitely with runaway debt. According to the Committee for a Responsible Federal Budget website, “High and rising deficits and debt can lead to persistently high inflation, rising interest rates, slower economic growth, increased interest payments, reduced fiscal space, greater geopolitical risk, and growing generational imbalances.”
No kidding. Borrowing like crazy is bad. It’s not sustainable. It will come back to haunt us. Isn’t that what our parents taught us and what we teach our kids? Live within your means, we tell them. It’s common sense. It’s Life 101.
What will our kids think when they learn that the rules of life don’t apply to their government?
What will our kids think when they learn that the rules of life don’t apply to their government?
What will they think when they learn that in the surreal world of politics, promise peddlers never have to suffer consequences for making promises they can’t afford and spending money they don’t have?
If members of Congress are curious about why only 2 percent of Americans have a great deal of confidence in them, as per the latest Gallup poll, they might want to follow the money that comes out of those printing machines.
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