One of the most notable developments of 2019 was the way the year ended on a fiscally irresponsible note.
According to a report from the Congressional Budget Office, the federal deficit stood at $984 billion, while the national debt totaled $23 trillion. Such huge levels of fiscal irresponsibility caught the attention of commentator and TV personality John Stossel. Stossel correctly describes the national debt as the ”23 trillion elephant in the living room.”
Stossel points out how obsessed Congress and the media are with political charades such as the impeachment proceedings and not real issues that have an impact on everyday life, such as the national debt. Sadly, this is just business as usual on Capitol Hill. Both parties are very much satisfied with the status quo of central banking, income taxation, and big spending. Politicians work diligently to avoid reforming any of these issues and will likely continue to do so in the near future.
To the Trump administration’s credit, it came out swinging by making tax reform and bureaucratic deregulation major plans of its policy agenda. As a result, businesses are running well and the economy is humming along without many issues in the short term.
However, America’s fiscal policies leave a lot to be desired and the growth we are experiencing may not be as sustainable as people think. Last year, economist Peter Schiff called attention to the fact that the U.S. government has achieved economic growth through debt-financing, where the government is essentially borrowing money to eke out economic growth. All the while, the national debt continues to balloon. Even Federal Reserve Chair Jerome Powell said, “The federal budget is on an unsustainable path.” Something will eventually have to give and the U.S. will inevitably find itself in another economic meltdown.
Reversing Washington’s fiscal misbehavior will require bold action. For example, the U.S.’s military presence will have to be substantially scaled back and many entitlement programs will have to be phased out — moves which will obviously anger many interest groups and voters. Many domestic programs have strong political consensus surrounding them. However, history has demonstrated that what’s popular is not always what’s right. Maintaining this fiscal largesse will put the U.S. on the path to fiscal doom. It will take a frank discussion with the American people to illustrate the dangerous fiscal waters the American government is swimming in.
We must be grateful for some of the entrepreneurs we have who are able to produce countless goods and services and provide employment opportunities to Americans in spite of all the regulations they face and the complicating fiscal improprieties the government commits.
However, this house of cards can only stay up for so long. Future generations will eventually have to pick up the tab for their predecessors’ profligacy. No moral society would shift such a burden to the unborn. The very least we can do for our posterity is leave them a fiscally sound environment where they do not grow up in fear of having to pay massive taxes to service an astronomical debt that previous generations failed to pay off.