Category Archives: Debt and deficits

National debt reaches $40 trillion

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tax, taxes, debt, deficits, spending, trillion, State of the Union, deficit hawks, balanced budget amendment, Jonathan Bydlak, immigration, $98.8 trillion, $970 billion, Social Security cut, $40 trillion national debtForty trillion dollars. That’s how big the national debt has become as of Wednesday, August 19.

The debt reached that $40 trillion milestone less than five months after hitting $39 trillion. At this rate, it will hit $50 trillion in six years, according to the Peter G. Peterson Foundation. 

The numbers are so big that it’s hard to wrap one’s head around them, so here’s some perspective: Forty trillion dollars is equal to roughly $116,700 for every American man, woman and child. It took almost 200 years for the national debt to reach $1 trillion in 1981; it’s grown $39 trillion in the ensuing 45 years. 

Much of that growth has come since the turn of the century. In fact, the debt has doubled in less than 10 years. 

Last year, the federal government spent $1.78 trillion more than it collected. Government deficit spending now comprises 5.8% of the U.S. economy. Can you imagine where the economy would be if we weren’t “borrowing” from our grandchildren? Continue reading →

We’re not going to balance the budget

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tax, taxes, debt, deficits, spending, trillion, State of the Union, deficit hawks, balanced budget amendment, Jonathan Bydlak, immigration, $98.8 trillion, $970 billion, Social Security cutLet’s be honest: The federal government probably will never balance its budget again, so eventually there will be a debt crisis. Times will be harder, and Uncle Sam will not be able to bail us out.

More evidence backing this bleak outlook came July 21, when the 10-year Treasury yield reached 4.6%. By July 29, it was 4.641%.

The 10-year Treasury note is one of the ways the federal government finances its borrowing. Investors in the United States and in foreign countries purchase the bonds and then receive interest on their investment. 

Who pays for that interest? Today’s taxpayers – and tomorrow’s. The higher the yields, the more taxpayers pay. While today’s amounts are not particularly high by historical standards, they’re 60% higher than the 2.8% percent average over the last decade. Continue reading →

Will Arkansans see $430 Social Security cut?

tax, taxes, debt, deficits, spending, trillion, State of the Union, deficit hawks, balanced budget amendment, Jonathan Bydlak, immigration, $98.8 trillion, $970 billion, Social Security cutIf Congress doesn’t act, the average Arkansas retiree could see a Social Security monthly benefit cut of $430 in 2032, based on findings from the nonpartisan Committee for a Responsible Federal Budget.

More than 19% of the state’s population, or 589,427 Arkansans, could be affected, including retirees, survivors and dependents. Arkansas could lose somewhere around $3 billion, which would be 1.6% of its economy. That percentage is the eighth highest among all the states.

All of that’s according to a new interactive tool, “No State Spared,” on the CRFBs website at www.crfb.org/nostatespared.

The reduction would occur because the Old-Age and Survivors Insurance Trust Fund is set to become insolvent in the fourth quarter of 2032. 

That’s the funding mechanism that pays Social Security benefits to senior citizens and their survivors. Another Social Security trust fund for disabled Americans is in good shape for at least the next 75 years.

Continue reading →

Jett: Arkansas needs a ‘stress test’

Large banks must perform “stress tests” to ensure they would be OK if the economy took a severe downturn. Should Arkansas’ state government do the same?

Former state Rep. Joe Jett, who chaired the House Revenue and Taxation Committee for eight years until he left the Legislature in 2022, believes it should. He’s particularly concerned about what would happen if the federal government reduced the billions of dollars it sends Arkansas’ way.

The former lawmaker and farmer from Success, Arkansas, now splits his time between working with the Rose Group Advisors business strategies and lobbying firm, crop dusting, and being a relief aerial firefighter fighting wildfires in the West. He’s also a grandfather to four grandsons ages 6-16. His two sons now run the farm where he and his wife still live. 

Jett said state government should perform stress tests like large banks must do under the 2010 Dodd-Frank Act, which was a response to the preceding financial crisis. Some states have already started doing so. Continue reading →

Social Security crisis this year’s election secret

tax, taxes, debt, deficits, spending, trillion, State of the Union, deficit hawks, balanced budget amendment, Jonathan Bydlak, immigration, $98.8 trillion, $970 billion, Social SecurityHere’s an issue not being discussed much in this year’s campaign: The winners of U.S. Senate races across the country likely will face a Social Security crisis near the end of their terms, about the time they would run for re-election.

 In Arkansas, that would be Sen. Tom Cotton or one of the candidates seeking to replace him.

Both the Social Security Administration’s actuaries and the Congressional Budget Office have said that the Old-Age & Survivors Insurance Trust Fund, which pays seniors’ Social Security benefits, will become insolvent by the end of 2032.

That’s less than seven years from now. Continue reading →