Crosstalk: Congress blew it on budget deal

The House and Senate increased their own budgets in the omnibus spending package.

The legislation boosts the Senate budget to $919.9 million, up $48.8 million from fiscal year 2017, according to the congressional summary of the bill.

Meanwhile, the House increased its budget to $1.2 billion, which is $10.9 million above 2017 levels.

What in the (word not allowed) is anyone even associated with Congress getting a raise for? The career politicians in the House and Senate can’t even pass a spending bill for a full year, or give up pork projects in the interest of national solvency.

“For perspective,” noted Investor’s Business Daily, “until 1991, the entire budget of the federal government for the whole year was less than $1.3 trillion.”

If you want to raise your blood pressure, visit www.usdebtclock.org and watch the numbers clicking upward. The national debt now tops $21 trillion and every baby born in the U.S. today owes $64,269 as his or her citizen share. How egregious is that?

The crux of the problem is that politicians know that they must bring home benefits to stay in office. They know that if real budget reductions are enacted, public employee unions and people receiving government assistance will mount an outcry. Their phones and email inboxes will be flooded with angry messages.

The root of the problem lies with “We the People,” who now vote for our own selfish interests. Benjamin Franklin rightfully said: “When the people find that they can vote themselves money that will herald the end of the republic.”

Proponents of the spending bill laud the fact that it took President Donald Trump twice as long as his predecessor to rack up his first trillion in deficit spending. What’s not to like about that?

Never mind that the national debt is up to historic levels because the government has long been spending more money than it rakes in. And debt to fuel public consumption – Social Security, Medicare and Medicaid – only presents advantages to the current generation.

Given that national debt is growing faster than the American population, it is important for people to understand the effects:

• As the debt per capita increases, the likelihood of the government defaulting on its debt service raises the price on treasury securities to attract new investors. That reduces the amount of tax revenue available to spend on other government services because more will have to be paid out as interest on the national debt. That lowers the standard of living for many Americans as less money is available for economic enhancement projects.

• When the rate offered on treasury securities goes up, corporations operating in the U.S. are viewed as riskier, which increases the price of newly issued bonds. That results in the price of products going up to cover the added debt service, so inflation occurs and everyone pays more for goods.

• The cost of borrowing money goes up because the lending market is directly tied to the short-term interest rates set by the Federal Reserve and the yield offered on treasury securities. Higher interest rates stall the housing market and lower property values.

• As the price of securities goes up, riskier investments, such as corporate debt, lose appeal. Corporations begin having a difficult time generating pre-tax income to offer a high enough risk premium on bonds and stock dividends to justify an investment. That reduces the size of the private sector, which actually pays the bills.

• Most importantly, the U.S. loses social economic and political power as it risks defaulting on the money it has borrowed. Debt then becomes a national security issue.

America needs to clean up its act. We owe it to our children and grandchildren.

— RaeLynn Ricarte

I heard a lot about the growing national debt during the Obama presidency, the frequent subject of arguments in the newsroom.

I’m no fan of national debt, believing that it compromises a country’s ability to function long term. No disagreement there.

Where we disagreed was whether or not the Republican party, with their “budget hawks” and anti-debt policy platform, would in fact save the country by taking on this important issue.

I argued that they wouldn’t. Cutting the debt makes some great sound bites on the political talk shows, but it would require better leaders than you will find in either political party to do something about the issue.

And I was right.

The Republicans are just as inept at reducing the debt as the Democrats.

Today, as we engage in a tit-for-tat trade war with China even as Congress passes a 6-month budget of over a trillion dollars, the deficit is not a legislative priority for the Republican party any more than it was for the Democrats.

The cost, for Americans, will one day come home to roost.

Perhaps sooner, rather than later.

The trade war the president is currently waging with China, coupled with the increase in national borrowing to fund the American dream, are not just odd bed fellows — they are putting America in a position of long-term weakness.

It must be, politically, a little weird to walk these two roads at the same time: Talking tough with Beijing on trade and slapping tariffs on steel and aluminum one minute, down on their knees the next, asking to borrow a little money to tide the government over for a few months.

It creates a position of weakness and one can only wonder what would happen if China said, “No thank you, we don’t want to fund your government anymore.”

Given that a large portion of the new budget is for military spending, it would not be amazing to be turned down on a loan by any number of countries.

Then what would America do? Surrender? Go bankrupt? Borrow money from Russia or North Korea? Start a war?

As both parties come home crowing about all the money they secured for their states, there are smiles all around — but like any borrowed money, there are a great many strings attached that will be entangling our children for generations to come.

Passing big tax cuts, followed by big budget increases, may well be stimulating, but it’s dangerous as well: At some point, America will have to pay up, or risk being invaded by debt collectors.

I recently heard an economist suggest, in regard to the president’s tariffs, that China was well positioned for a trade war with the United States.

Such wars are not as easy to win as the president has claimed; you have to play tough, but you have to play smart, too.

A lack of “smarts” is giving the stock market fits and those who follow these sorts of things appear genuinely concerned with potential outcomes.

Big talk isn’t going to be enough if America fails in its trade goals, disrupting the economy to no benefit.

Add in the inflated budget and growing deficit, and the stage is well set for a fiscal crisis of historic proportions.

A report released Friday concludes that “recent tax-and-spending legislation passed by Congress is helping to drive up the federal deficit and push the national debt as a percentage of annual economic output to levels not seen since just after World War II.”

Just after World War II, American’ were harvesting Victory gardens and buying bonds to support the war effort.

America was united in victory and engaged in our future.

That is not the case today. Americans appear united only in a desire to have their needs met by the federal government.

“These projections show a fiscal situation that is clearly unsustainable,” concludes the report, a copy of which was obtained by USA Today.

There have been plenty of Americans waving the red flags of warning. Many have been Republicans. Some of them Democrats. Yet, here we are. It’s impossible to say if we are about to tip off the fiscal cliff, although it’s possible we are, as we are clearly on a slippery slope.

— Mark Gibson