Unless we change our thinking and behavior, a tipping point of dramatically negative change lies ahead in the US, though how quickly it will engulf us we do not know. Positive change is not likely as a result of the 2020 presidential election, with so many Democratic candidates making so many unaffordable promises. And if Trump is reelected, both the nation’s financial condition and its place in the world will continue to diminish.
The nation’s bleeding balance sheet requires intensive care. The national debt has jumped up again with the Trump tax cuts, as has the federal budget deficit (both political parties are responsible for this).
Projections show that without intervention those patterns will worsen, unless legislation creates stiff tax increases on the wealthy (the top 20 percent of earners pay 40 percent of all federal taxes), or severe cuts are made to benefit programs such as Social Security and four health care programs (Medicare, Medicaid, CHIP, and marketplace subsidies)) which together in 2017 consumed 50 percent of the federal budget. Defense Department operations consumed 15 percent and interest payments on the national debt consumed 7 percent.
We live in extraordinary times with numerous unexpected and (in our lifetimes) unprecedented changes afoot. More and more people are falling behind, falling into homelessness and poverty even though many of them work fulltime. While the unemployment rate is at historic lows, most job increases are at the low end of the wage scale, and wide spread rebirth of good paying manufacturing jobs just isn’t going to happen.
The American economy is changing rapidly and we are the canaries in our own coal mine, the “indicator species” of events to come as a result of: digital innovation, increased robotic capabilities, low wages, temporary “gigs” in “scut work” jobs, living in cars, many employers’ brutal demands on “temp” employees, exploding housing prices, higher rents, widespread depression and drug addiction (often addictions stumbled into as brief escapes from the pain of changes mentioned above.)
Though we need new ideas, neither Democrats nor Republicans have seriously addressed these problems. Democrats years ago abandoned their traditional commitment to the working class population of America. Instead, they began multiple adulterous affairs with Wall Street, big banks and major corporations to finance their re-election campaigns, all the while hypocritically pretending the cornucopia of big money has no impact on their votes in Congress. (Republicans pretend the same.)
Republicans seem incapable of caring about anything except simplemindedly “starving the beast” of government, except when it came to increasing the national debt by a trillion and a half dollars in one fell swoop in December 2017, based on Trump’s specious notion of goosing the economy. They goosed it, but after several months of a sugar high little has been accomplished, except companies using tax savings to buy back their own stock and provide dividends to shareholders. Meanwhile, the nation has plunged further into debt.
Private companies’ investments in expansion remain in negative territory according to “Forbes” magazine (Sept. 28, 2018). The business oriented web site, “Market Watch” (Oct. 28, 2018), noted, “The historical evidence shows that changes or levels of taxes don’t have much impact on investment.”
But Republicans still push for tax cuts even in the face of evidence that increasing the national debt has four bad consequences: (1) lower national savings and income; (2) higher interest payments on the national debt (thus requiring large tax hikes and/or budget cuts to avoid eventual default on our debt payments); (3) decreased ability to respond to important problems (international conflicts, infrastructure repairs/improvements, funding of education, etc.), and (4) gravely increased risks of a financial crisis.
Worse, both halves of the political spectrum (the Democratic left and Republican right) create their own statistics to support their own arguments. Does anyone trust any statistics from either of these sources anymore? So, what can be done?
Although it seems unlikely to happen, both political parties could end their childish ideologically driven conflicts and seek compromise solutions to the nation’s problems. Both sides have good, practical ideas. It still amazes that neither of the political parties tries to lessen such pointless animosity, or gives the other side any credit for having a good idea. They are like children fighting over the same toys, and we are the toys. We need so much more from them than they offer.
Of course, the underlying problem (and the solution) lies with us, the public. We, through our social media rants and tribalizing tantrums, have shaped the national political parties into their current pathetic condition. We threaten elected officials with electoral defeat and they pander to us like small children.
We want our government services and subsidies, but we do not want to pay for them. We want neither new taxes nor service cuts, but avoiding these solutions will take us down. We only want to embrace three or four word slogans and social media ravings that contribute nothing except to build our anger further and make us feel cozily part of an ideologically unified tribe. We are the ones who believe no good ideas can come from “those knuckle dragging conservatives” or “those snowflake liberals.”
Democracy is the least bad system of government that we know. It is weak because whenever it is possible to do so, everyone would like to get access to the public purse, get a little sugar from our friends in government. And elected officials are terrified that if they don’t comply we’ll dump them out.
We need government services, including a strong military to protect us in a dangerous world, meaningful help for the poor and disabled, a rebuilt infrastructure, education for the future, and on and on. We need grownups in government, not self-serving party hacks.
If we don’t pay for services with tax revenue, then we’ll continue to use our national credit card. But one day (maybe sooner, maybe later), investors and governments around the world will start to believe we are so undisciplined with our spending that we’ll never meet our debt payment obligations. They will quit loaning us money by refusing any longer to purchase our bonds.
We will probably be terribly shocked on that day, like a teenager with a new credit card who knew there would come a time to pay the bill, but happily ignored that and charged up a pile of new stuff until the day his credit card was refused. He turned to Mom and Dad, but they just shrugged and walked away.
We have no Mom and Dad who will cover our growing tab.