America's Talking - Critics: Where’s Debt Plan as Deficit Hits $1.5 Trillion, Debt Tops $35 Trillion?

Episode Date: August 17, 2024

The federal deficit so far this fiscal year has already hit $1.5 trillion, the U.S. Treasury Department reported in its monthly fiscal update. The federal data comes just days after the national debt surpassed $35 trillion, an unprecedented figure that worries economists and budget analysts. For now, though, neither Republicans nor Democrats have prioritized getting the deficit under control or showed unity in putting a plan forward to do so. Hosted by Simplecast, an AdsWizz company. See https://pcm.adswizz.com for information about our collection and use of personal data for advertising.

Hello and welcome to America in Focus powered by the Center Square. I'm Dan McAulb, Chief Content Officer at Franklin News Foundation, publisher of the Center Square Newswire Service. The national debt surpassed $35 trillion this month. That's the amount of money the federal government has borrowed over the years to pay for deficit spending. Interest payments on that debt alone cost taxpayers more than the annual budget for the Department of Defense. Joining me to discuss this is Casey Harper, the Center Square's Washington, D.C. Bureau, Chief? Casey, let's face it, government spending is out of control. Why should Americans be concerned?

And why isn't the ballooning debt a significant campaign issue heading into November's presidential election? Yeah, I mean, Americans should definitely be concerned. It's hard to know when he used the word balloon, ballooning. And so I'll continue with that. The debt is ballooning for sure. But, you know, the debt's been ballooning for a couple of decades now. And, you know, you look around, everything seems fine. But we don't know when that balloon's going to pop. And we have seen some signs of some rumblings of kind of the unprecedented money printing and inflation, inflationary activities that the federal government's been engaged in. You know, prices rose 20 percent since President Joe Biden and Vice President Kamala Harris

took office. Americans are feeling the weight of that right now. A lot of economists are celebrating that inflation is down. But just to be clear, what they mean is that inflation is not rising nearly as fast as it did, but prices are still rising. They're just kind of rising at more normal levels now. And they certainly have not gone down to the pre-pandemic or pre-Biden levels. And so, yeah, over 20% increase since Biden took office. And some things, some things like groceries and different things are much higher than that and are still rising much faster than even the normal inflation rate. You know, for instance, chicken and pork is about, or it was about 10% in the last year, which is an incredible increase, is, of course, a staple that almost all

Americans are going to be looking to buy at the grocery store. And so we've seen these kind of rumblings, these moments where the unstable, the cracked foundation that we've created in the economy by the money printing starts to have impact. But for now, the house is still intact. And so the life continues. But if you look at the projections, Dan, from the Congressional Budget Office, where it's kind of crazy to see just how, you know, the national debt, for instance, is on track to be twice as much as the GDP. Interest payments on the national debt are just a few years away from being the single biggest expense to the federal government. And that number is only going to continue to rise. And so you can get to this point, you can imagine, and not the too distant future where half of the federal budget is just for interest payments.

that's not going to happen in the next presidential term, very likely, but it is in the near future. And so I think we have, you know, these warning signs we're seeing with inflation and, you know, we saw the market dip a few days last week. But I think it is something voters should be concerned about. But right now, Dan, neither party, Republican or Democrat, seems very concerned about it at all. Another reason taxpayers should be concerned about it, Casey, is, is, programs such, retirement programs such as Social Security and Medicare, they're already just a few

years away from near insolvency. As the debt continues to balloon, as the national debt continues its upward pace, are programs like Social Security and Medicare maybe in jeopardy? Oh, they've been in jeopardy. They're definitely in jeopardy, no matter what any politician tells you. I mean, some hard decisions are going to have to be made in the future to save. these programs. Right now, no one has the, you know, courage or political will to even cut, you know, spending that is not nearly as precious as those programs you laid out, Dan. I mean, we're, they're a huge, so for instance, if you look at the Treasury Department's data laying out the last fiscal year, the deficit so far has been $1.5 trillion. And of that,

Social Security is the biggest expense at $123 billion. Then Medicare is $92 billion. And then, Dan, as we said, the third coming in third is interest on the national debt at $81 billion. And then you get to more things like national defense is $71 billion. Then you go further down, there's things like veterans and education. I mean, we spend $12 billion on education and $81 billion on interest, right? 12 billion on transportation and 81 billion on interest, right? So when you talk like we can't, you know, there's no political will or willingness for lawmakers

to even trim some of the things like for transportation or education or veterans, health care, national defense. And so when you talk about touching some of these big entitlements that continue to grow or are on the path to insolvency, no, there's no plan. They are in danger. They are going to become insolvent, insolvent, unless something changes. and right now nothing is changing at all. And both any candidate is terrified to even bring it up for fear of immediately losing their election.

Casey, there are really only two ways to address the national debt or a combination of two things, and that is drastically cut spending or drastically raise taxes. Certainly neither presidential candidate wants to talk about raising taxes, I wouldn't think, particularly in today's economy where you mentioned, you know, inflation has cost more than 20% are more than 20% higher than when President Biden and Vice President Harris first took office. You add tax increases on top of that. Things are just too expensive as it is. So expense cuts. But no one has the nerve in Congress or the White House to talk about significant expense cuts. Yeah, I mean, right now both candidates are talking about cutting taxes on tips, which is a very popular policy with a lot of people. Democrats are always talking about raising taxes on the ultra wealthy.

And of course, there is probably a little, you know, some revenue to be made there for sure. There are downstream implications of that or consequences of that. if that, you know, it can push wealthy people out of the country or out of the state where the taxes are raised. It can disincentivize investment and business growth. And, you know, I think a little bit probably it could be withstood without many ramifications. But if you, you hiked up taxes, you know, to what we saw maybe, you know, a different era in American politics, you know, where they were like 70% on the ultra wealthy. there's some big consequences for that. And you see that the more you, when you raise taxes at level, you actually collect less revenue. So there is, you know, I think there, there is more money to be made in raising taxes, of course. But the current spending level is, I mean,

35 trillion debt, deficits that are regularly over one trillion. You can't tax your way out of this problem. It'll help. But the spending right now is so extravagant. It's so unprecedented. even in modern political history, I mean, the spending levels right now are just out of control. It's hard to overstate. For instance, before COVID, there was no deficits over a trillion dollars. It was kind of a red line. The deficit had never been over a trillion. And then, you know, during COVID and post-COVID, it's normal.

We had two trillion dollar deficits. And now we're at 1.5 this year. And so we went from, in the matter of a few years, in the middle of a debt crisis, from, you know, 2019 to, to 2024. We went from the deficit being less than a trillion to being over a trillion and a half nearing two trillion dollars this year. Thank you for joining us today. Casey, listeners can keep up with this story and more at thecenter square.com.