As I have said many times, the National Banks around the world begged President Clinton to not buy back any more treasury bonds because they used them as their National Reserve. All the thirty year, most of the twenty year and some of the ten year bonds were gone. We were on the way to paying down our National Debt.

            Then along came Bush II and his tax cut which reversed the pay down. He cut taxes and increased spending just as Reagan had done but Reagan saw the debt grow and increased taxes. Obama continued the ruinous Bush tax cut causing the debt to increase to over twenty trillion in his eight years. Trump cut taxes in his first year and ran the debt up 7.8 trillion more to about 28 trillion today.

            Both parties are responsible for this debt because they passed the tax cuts, hamstrung the IRS, and passed the bills spending the borrowed money. Today Minority Leader McConnell complains about the Biden and the Democrats running up the Debt but he has been Majority Leader for twelve of the last fourteen years. He pushed the ceiling raise in Bush and Trump years and fought against it in the Obama years and this year even though Trump ran the increase of debt up to June. McConnell doesn’t want to pay his bills.

            The best way to fix the debt ceiling is to raise the taxes back to rates of the booming Clinton years or even the end of Bush I years. Let’s not create fifty or ninety year bonds passing along yesterday’s tax cuts insanity to future generations!

That is 30 followed by twelve zeros. By the end of the year we will probably owe at least that amount and if the Congressional Budget Office is right, the virus will still be affecting Americans in 2021. They see at least 10% unemployment and a recession still in progress. At least two more give-aways are on-line for May and July. More will be later this year and into next year.

Regular readers know I have railed against the yearly budget deficits and exploding National Debt for years. Bush II put us back into the red with his tax cuts. When the Great Recession hit we were already running a deficit during a growing economy. Obama couldn’t raise taxes so he tried to cut expenditures. It was pretty much a bi-partisan effort to keep spending. Sequestration was proposed by the White House and finally accepted by Congress.

Trump’s increase in spending and tax cuts has sped up the flood of red ink. During a growing economy we have been growing the yearly deficit and National Debt. Before the virus hit we were on schedule for 1.2 trillion deficits. This year’s will now probably be around eight to ten trillion. Our future yearly budget payment on the debt may be a third of the government’s income! And yet Trump is looking at another tax cut!

We must have a sizable tax increase to pay down the debt. America can’t go on long before we are literally drowning in red ink. The Bible says to save during the seven good years for use in the seven bad years. We did not! Now we will see a “winter of discontent.” Oh, so many zeros!

Here is the naked truth about the Federal Budget. For every sixty dollars you pay in income tax, the treasury pays out one hundred dollars. Even with the backdoor tax on imports the deficit will be $1,200,000,000,000 each year for the next decade. Who is responsible in Washington, D.C. for this fiscal catastrophe? We are $22,000,000,000,000 in the hole now. If we don’t have a recession – Ha, Ha, Ha – during the next ten years we will be over $35,000,000,000,000 in debt.

The President has said he wants the Federal Reserve to cut the rates to zero or below so we don’t have to pay out much interest on the debt. Rather than putting the country’s fiscal policy on a firm footing, the President is doing his slight-of-hand financing he used in business.

Most of the Democratic Presidential contenders are proposing radical but needed programs which will cost trillions. Some have come up with a tax increase to pay for it. None of them have even mentioned the huge deficit and debt we are already making future generations pay for. This is the question to ask anyone running for any political office whether it is for city, county, state, or national office. What is your plan to eliminate the budget deficit and debt without using some fantasy income or shifting debt to the future? They are all running deficits. Keep asking until they answer! Make it clear if they don’t have an answer then they should not be in office!

Why do we need low interest rates? I bet you are completely wrong! With the low rates of today Washington is paying interest of over 400 billion this year on the National Debt of over TWENTY-TWO TRILLION. The truth is my former party has just pushed through at the behest of the worst President we have ever had, an optimistic yearly deficit of only ONE TRILLION DOLLARS.

It’s through playing with the numbers that the Congress claims last year’s deficit was under a TRILLION. Most numbers crunchers say it is well over that number. When interest rates return to normal we will be paying out over a TRILLION each year just to service the debt!

Medicare and Social Security will total over ONE AND A QUARTER TRILLION this year. In ten years they will total TWO TRILLION. The “Lock Box” will not be able to give out full benefits in seven years because there will be more people drawing on it and because Congress is unwilling to do something about it. Not since Gingrich backed out of his plan in 1997 has anybody had the guts to fix it.

Why do we keep electing Republican and Democrat Senators, Representatives, and Presidents who are running our government into the financial ground?

Here’s the rose colored glasses projections. If we have no recessions, wars, or any other normal event, we will reach one hundred percent debt to GDP ratio in ten years. Is it their idea to bankrupt the government to get rid of Medicare, Social Security, and the other social programs the wealthy wants to eliminate? Is that the plan and why Republicans no longer fear massive deficits? Is it because they fear Trump’s wrath more than they fear the voters? Take off their rosy lies and look at reality!

Has anyone noticed the first thing a new president or prime minister wants to do is cut taxes and regulations to jump start their economy. Funny thing is their country is always heavily in debt. Cutting taxes further puts them further into debt. We are a prime example of this stupidity. We were told the Trump cut wouldn’t add to this debt — Ha!

When George W. Bush came into office he cut taxes on a budget that was paying down the National Debt. His tax cut stopped the debt reduction and together with his wars started us going on a downhill debt trajectory. When Obama came into office we were in the depths of the Great Recession so raising taxes was out of the question. As the economy started to recover and revenues started to increase, Obama put a sequester on expenses. However the National Debt continued to rise. When Donald Trump got in he cut taxes again during a booming economy and our expenses now exceed revenue by over a trillion dollars each year. In order to even balance the budget we need a 40% increase in taxes.            

We currently have a better than average debt to Gross National Product of approximately 80%. Each year the percentage will go up since the yearly deficits add to the debt. At what point can we no longer pay the interest? At what point do the investors here and abroad decide they don’t want to finance us anymore? Foolish short-sightedness to get elected and stay in office is going to bankrupt America. Maybe that threat is the point. To stave off financial collapse, the conservatives will demand elimination of most aid programs like Medicare, Medicaid, Social Security, food subsidies, and others.

The National Debt is like one of those Ponzi schemes where the people involved get arrested. In the classic scheme an organizer cons some people into investing some money for a high rate of return. The return is their own money. Those people get others to invest increasing the pool. The organizer takes lots of pieces of the pool. The problem occurs when too much is taken out and it ends badly for everyone.

Our government takes in money and pays out more than it takes in. The difference is a yearly deficit and adds to all the other yearly deficits in the National Debt. As the deficits increase, because less money is asked for each year, the result is the debt is increased. At some point the debt will become too great and it will not end well for anyone.

A 40% increase in revenue to just end the deficit is needed. The increase would usually come from income taxes. However the government has re-found an old source of income. Before the income tax, government was funded by tariffs–just like the tariffs we are paying by buying items made in China and other countries. This sneaky back-door tax will not offset the latest tax cuts. Current tariffs are a regressive tax because these are designated to affect the middle and lower tax brackets more than the top brackets.