In the hole with no way out

Can we live forever with no frugality and limitless indulgence?

There are four overarching problems facing our country that neither candidate wants to talk about, much less solve. Two of them are domestic and two concern America’s safety and its place in the world. The domestic problems are (1) massive and growing debt abetted by the death of frugality and a childishly indulged, gimme-now culture, and (2) an educational system that has thrown away standards in favor of “equity” and/or mush, and therefore produces ignorant children and teenagers unready and often unable to meet even the basic challenges of adult life. The international problems are (1) the failure, borne of stupidity and cowardice, to confront and defeat Iran and its soon-to-be nuclear terror, and (2) a degraded military whose willingness and ability to defeat advancing and emboldened enemies (e.g., China) is more seriously in question than at any time since the end of WWII.

Kamala Harris offers “vibes” and her mindless plastic smile. Donald Trump offers his version of how great he is together with complaints about the last election.

But don’t get me started on that — Ringside will have plenty to say about it over the next month and very likely beyond. For now, I want to take a look at the fact that we’re on the fast track to national bankruptcy (to call it what it is). I’m embarrassed to say the prod for doing this comes from nothing other than today’s New York Times. Its article is aptly titled, “In the hole,” and it starts thusly:

Sometime in the next two years, the federal debt will likely cross a worrisome threshold: It will exceed the size of the country’s annual economic output (or G.D.P.) for the first time since 1946.

Federal debt as a share of G.D.P.

A line chart showing the federal debt as a share of G.D.P. going from over 100 percent in the late 1940s, down to almost 20 percent in the 1970s and back up to almost 100 percent in the early 2020s.

To clarify: The graph depicts the ratio of national debt to GDP over a little more than the last 80 years. At the very beginning, on the left side, it shows the steep rise in debt starting in 1941 to finance WWII. After the War there followed a steady reduction in the debt/GDP ratio until about the end of Nixon’s term in the mid-Seventies. For roughly the next 35 years, the ratio rose overall, although taking a noticeable dip from about 1994 to about 2000. (Remember the Contract with America)? A relatively modest increase then resumed. The modest increase became a tidal wave at the beginning of Obama’s administration after the 2008 election, and our unhinged borrowing and spending has continued ever since, including, without let-up, during Trump’s term. The acceleration in borrowing and spending is now back to where it was when we and the world confronted Hitler.

Or to be more summary: Look at the last quarter of the graph; that will tell you where we’re headed.

The debt-to-G.D.P. ratio is merely a statistic, and nothing will inherently change when the ratio exceeds 100 percent. But it will be a sign of the country’s serious budget challenges. The large debts of the 1940s had a clear rationale: They were the price of winning a world war against a murderous fascist alliance. Today’s debt has no such simple explanation.

“No such simple explanation” is Times-speak for “chipper indulgence of the idea that government has no limits and can spend whatever it wants.” (You always need your decoder ring when perusing the Times).

It instead reflects an accumulation of causes, including large tax cuts signed by Republican presidents…

Isn’t Ms. Harris on the tube every other night promising major “middle class” tax cuts? Not that she means it, which she doesn’t, but as long as she’s going to say it…

…the continued rise in spending on Medicare and Social Security as the country ages…

That’s because we couldn’t know that time goes in only one direction and it was inevitable that the big Baby Boom population bulge would get older! And not that the passage of time is anything like the whole explanation anyway. We’ve made Social Security and Medicare payouts more and more generous — as liberals insisted (compassion, ya know) — without providing any way to pay for it. That, after all, would require sobriety and adult thinking. We have done this for decades. I guess we thought the bill would never come due.

…and stimulus bills passed by both parties during the Covid pandemic and 2007-9 financial crisis.

COVID, the all purpose excuse for an explosion of debt (and lowering standards everywhere else in the culture while we’re at it) — and an explosion well underway more than a decade before anyone ever heard of COVID.

(Spending on the military, by contrast, has declined as a share of G.D.P. in recent years.)

Well, yeah, but that’s OK because China, Russia and Iran have become like Mr. Rogers.

Still, far enough down the page to mollify the editors, the author kind of owns up:

What these causes have in common is a federal government that seems incapable of paying its own bills — and an electorate that tells pollsters it cares about the federal debt but votes for politicians who support low taxes and high spending.

And there it is. Politicians, Democrats mainly but not exclusively, are feeding the electorate what it wants to hear. And what it wants to hear is roughly what a five year-old wants to hear: That we can have whatever we want and not worry about it.

The problem is that we’re not five anymore. The related problem is that, as five year-old’s are still learning but adults need to have learned, fantasy and indulgence have consequences, usually unpleasant and sometimes brutal.

The question we face is just this simple: Do we think we’re going to become the first civilization in history permanently to consume more than we produce? If not, how are we going to pay the gargantuan debt we’ve accumulated, and avoid creating more?

If I had the answer, we’d move the Ringside subscription price up to $1000 a year (and no, you wouldn’t be able to pay with borrowed money). Still, I think there are some ways to start, about which I’ll say more in future posts. For now, I’ll just note that it’s not higher taxes. The problem is not that we’re taxed too little (at least the roughly half of us who pay any significant federal income tax); the problem is that our appetite for government is way, way too much.

UPDATE:

As if on cue, the NYT tells us just now that we’re continuing on the path to fiscal disaster without so much as a second thought.

America’s federal budget deficit rose to $1.8 trillion in the 2024 fiscal year, reaching the highest level in three years, according to new Congressional Budget Office estimates released on Tuesday.

The increase from last year’s $1.7 trillion deficit came as tax revenue failed to keep pace with the rising costs of government programs and the mounting interest on the national debt.

The figures show the continuing fiscal strain facing the U.S. economy, where the national debt is approaching $36 trillion.

No one can actually grasp how much $36 trillion is.

Despite steady economic growth and low unemployment, annual deficits are growing again after declining from pandemic-era highs.

That’s because the pandemic wasn’t the source of the problem to begin with. Our self-indulgence and lack of courage even to look honestly at where we are is the problem.

America’s reliance on borrowed money to fund its priorities and pay its bills is not expected to end any time soon. Both Vice President Kamala Harris and former President Donald J. Trump are proposing policies that, if enacted, would cost trillions of additional dollars over the next decade. Much of that spending is expected to be financed with borrowed money.

We keep digging. If this were an individual, we would say he was crazy. As a country with a moral obligation to future generations, it’s a good deal worse than crazy.