It is important to understand that during this ongoing debate about the long-term fiscal solvency of the U.S. that the accumulated debt that has been generated in unsustainable. It is of equal importance to understand who the main culprits have been while accumulating these trillions in debt. The fact is that our country has accumulated not quite $37 trillion in debt that is owed to those who hold this debt as investments, usually by purchasing U.S. treasury bonds. U.S. bonds have traditionally been highly valued; however, recent fiscal negligence has lessened the value of U.S. treasury bonds. Having increased difficulty selling treasury bonds will ultimately drive-up the interest rate that the U.S. pays for deficit spending and cost even more for the interest on our accumulated debt. In 2024 the U.S. spent $1.2 trillion on interest payments and could spend $13.8 trillion on interest payments from FY 2026 to 2035. We cannot sustain our fiscal mismanagement much longer before the impact on our economy is devastating, and as always, disproportionately impacts lower- and middle-income households.
Most of this accumulated debt is a product of irresponsible Republican championed tax cuts, Democrats played a lesser role, that disproportionately benefits the morbidly rich, and our multi-trillion-dollar unbudgeted (estimated $5-6 trillion) military misadventures in the Middle East. These military actions were simply put on a federal credit card for future generations to pay. The proper way to fiscally manage the finances of the country is the budget for all expenditures and either find budget-cutting offsets or raise extra revenue to pay for unbudgeted expenses. Whenever off-budget military actions are taken, there should be an across-the-board tax surcharge to cover the annual unbudgeted amount. This would mean that all citizens would have skin in the game, other than leaving it to the small percentage of Americans who directly participate in these military actions. Tax cuts should be fully offset by corresponding budget cuts so that the population is aware of the specific choices being made by elected leaders. Continuing to be irresponsible and in essence, kicking the can down the road, reflects poorly on the political leadership we have had for decades with the notable exception of one short period of time while Bill Clinton was president, and he worked with a Republican Congress to balance the budget.
Since 1929, except for five years, the country has received less revenue than was spent for that fiscal year. Annual deficits were under $10 billion until 1968, the Vietnam War, and didn’t exceed $100 billion until 1982. The highest annual deficit was $4.2 trillion in 2020, the highest one-year deficit recorded to date, a product of emergency spending associated with COVID-19. Usually, in years past, high annual deficit spending was associated with some emergency or military engagement. Now we do deficit spending because we lack the political will to act fiscally responsible, and the millionaire/billionaire donor class wants to get a return on their campaign investment.
There are times when deficit spending is appropriate. It is fine to commit to long-term debt when investments are needed for nationwide projects like highway improvements and maintenance or electric grid improvements or other such massive projects that serve to improve and benefit the overall society. Deficit spending that adds to the accumulated debt to cut taxes for the morbidly wealthy is just foolish given our growing $37 trillion debt. The current president couldn’t care less about the national debt; the goal is to pay back the big-dollar campaign donors through tax cuts and underfunding the IRS to lessen the likelihood of any audit. When the IRS is understaffed, and they are grossly understaffed, they tend to forego auditing the wealthier taxpayers because of the time-consuming complexity of tax returns and audit more middle-income taxpayers.
There are a wide range of solutions to our deficit-inducing sugar high; however, somehow, we must severely restrict, impossible to eliminate, the influence of money on our political process. Without reducing the influence of money on our political process, the morbidly rich will continue to control politics and work hard to increase their wealth at the expense of everyone else. Social Security is an easy fix, just raise the cap to $500,000 taxable income, problem is solved. Stop tax cuts that are almost exclusively for the 1%. Stop automatically feeding more money to the Department of Defense until they complete a third-party audit, not been completed since the mid-1990s. Fully fund the IRS, so the estimated $1+ trillion in uncollected tax revenue is collected. There are a multitude of actions that could be taken to, over time, reduce annual deficit spending and reduce the national debt, but the impediments are many and the task requires honesty, courage, and fortitude, something sorely lacking by most current political leaders.
