The Federal Debt: Decades of Absent Leadership
Photo by Alice Pasqual on Unsplash
"How did you go bankrupt?" Bill asked.
"Two ways," Mike said. "Gradually and then suddenly."
- Ernest Hemingway, The Sun Also Rises
In October 2024, I wrote about my frustration with both presidential candidates. Neither campaign discussed the size of the federal debt or their plans to address it. (See the links below.) No leaders in either political party are talking about the debt or taking serious action to resolve this issue. The right will tell you that everything is the fault of Joe Biden and his presidency. The left will argue that the fault lies with Donald Trump's policies during the first term in office.
In this case, both sides are wrong because they are looking for simple answers to complex problems. They are also looking for scapegoats rather than the root causes. Below is a table showing the size of the federal debt since President Clinton left office in 2001.
Our debt has increased sixfold over the last 25 years. During that time, Democrats and Republicans were in the White House for 16 years each, and both parties held majorities in the House and Senate.
Getting out of this mess will probably take longer than it took to get here. Despite all the public pronouncements, chainsaws, and other flashy photo ops, nothing will fundamentally change until leaders from both sides work together to make incredibly difficult decisions. Those officials will have to convey hard messages to their constituents about the need to cut back on Federal expenditures. In a separate article (links below), I wrote about how the chaos management style that DOGE brings will be ineffective and may cause more harm than good. I stated that I agree with the goal but disagree with the how.
Reducing the debt cannot be discussed without looking for ways to increase revenue. The left will talk about making "millionaires and billionaires pay their fair share." This is a bit of a false choice. The top 1% of all wage earners, a little over $500,00 annually, already pay half of all federal taxes. Billionaires may seem easy targets, but the data does not support that position. There are approximately 750 billionaires in the U.S. with a combined net worth of $5 or $6 trillion. (Again, CoPilor, Claude, and Gemini provided slightly different answers.) If the government were to seize every asset they hold, making them penniless, the debt would only be reduced by 18%. At our current rate of deficit spending, the $6 trillion would stop the growth for 3 years. ( I have some ideas, but they are tangential to the focus of this article.)
While the government is not a business, one business reality applies. If a corporation's largest expenses are interest and other fixed obligations, like pensions and healthcare, it cannot adequately invest in its future. Corporations have the option to file for bankruptcy, and many have used this process.
The Federal government does not have this option.
To solve our problem, we must avoid hystronics and work together.
Related Articles
My Articles
An Example of Poor Analytics - The Federal Debt – LinkedIn
An Example of Poor Analytics - The Federal Debt - Medium
An Example of Poor Analytics - The Federal Debt - Substack
There Are Many Different Leadership Styles – Chaos Is Not One of Them – LinkedIn
There Are Many Different Leadership Styles – Chaos Is Not One of Them – Medium
There Are Many Different Leadership Styles – Chaos Is Not One of Them – Substack
Other Articles
Cassidy: The national debt is crushing the American Dream | The Hill
Six-Chart Sunday (#60) – The F.U.D. Factor | Bruce Mehlman's Age of Disruption
Making Sense of DOGE's Cuts | The New York Times
When inflation and recession gang up on the economy | Marketplace
The Budget Trick the G.O.P. Might Use to Make a $4 Trillion Tax Cut Look Free | The New York Times
Ray Dalio warns that mounting U.S. debt problems could lead to 'shocking developments' | CNBC
US Budget Gap Hits Record $1.1 Trillion for Fiscal Year So Far | yahoo!finance
In all fairness, Democrats have used the same trick the next article talks about.
The Budget Trick the G.O.P. Might Use to Make a $4 Trillion Tax Cut Look Free | The New York Times
Chips and Salsa: Snack-sized news and posts
Let the Madness begin! Two big upsets already. My team lost the play-in-game, so I'm already out.
NCAA upsets are happening more often | Silver Bulletin
I am always amazed that people will listen to and never question social media posters who obviously do not know very much about anything.
'Airport Theory' Will Make You Miss Your Flight | Wired
When people talk about SpaceX's Starship, they cite the innovation it represents. This article takes a critical look at the program.
Detroit did not kill the sedan. Consumers did with ther buying choices.
Detroit killed the sedan. Trump's trade war will make them wish they hadn't | Fast Company
Failure is an opportunity to learn and grow.
Early Career Failures Can Make You Stronger in the Long Run | Northwestern Kellogg
How zero may lead to breakthroughs in neuroscience.
Classic Calvin and Hobbes
Quotes
"There are two ways to be fooled. One is to believe what isn't true; the other is to refuse to believe what is true."
- Soren Kierkegaard
"Everyone nodded, nobody agreed."
- Ian McEwan
"The problem with the world is that fools and fanatics are always so certain of themselves, and wiser people so full of doubts."
- Bertrand Russell
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