Category Archives: Debt and deficits

Time not on side of just-in-time nation

March 19, 2020

By Steve Brawner
© 2020 by Steve Brawner Communications, Inc.

You know how personal financial planners are always telling us to save six months of living expenses in case we face hard times?

Turns out that’s good advice for a nation as well.

No one knows what the future will hold, but a Department of Health and Human Services plan, as reported by the New York Times, anticipates an 18-month coronavirus pandemic that “could include multiple waves of illness” with “significant shortages for government, private sector, and individual U.S. consumers.” Meanwhile, Treasury Secretary Steven Mnuchin told Republican senators the unemployment rate could reach 20%.

To cushion the blow, Congress and the Trump administration are hatching plans that would exceed the bailouts of a decade ago. The number $2 trillion is being reported. Both of Arkansas’ senators, Sens. John Boozman and Tom Cotton, are willing to go big. Cotton on Jan. 30 called for a “Manhattan Project-level effort” to develop a vaccine – the Manhattan Project being the World War II effort to develop the atomic bomb. He gave a chilling speech Monday urging “extraordinary measures,” saying, “(O)ur hour of great national testing has arrived.” He’s introduced four bills that would provide money to individuals and businesses, including $1,000 checks to individuals making less than $100,000 annually plus $500 for dependents.

That would pay the mortgage. Meanwhile, utilities in Arkansas are saying they won’t shut off power and water for those who can’t pay their bills. Continue reading →

Dear 36%: We’re on the wrong track

By Steve Brawner, © 2019 by Steve Brawner Communications, Inc.

A November poll by the Financial Times and the Peter G. Peterson Foundation found 64% of likely voters believe the country is on the wrong track in managing the national debt.

Which begs the question: What could the other 36% be thinking, if they are?

The poll found that 35% say the country is strongly on the wrong track while 30% say it’s somewhat wrong, which equals 65, not 64, because of rounding. Meanwhile, 24% say it’s somewhat on the right track, while 12% say it’s strongly on the right track.

It appears my columns on this subject have failed to reach all 330 million Americans.

So for the 36% who think we’re doing just fine, here are the numbers, according to the Treasury Department’s website. Continue reading →

Be more like former UA Trustee David Pryor

By Steve Brawner
© 2019 by Steve Brawner Communications, Inc.

We should think less about which tribe political candidates belong to, or where they fall on the left-right spectrum, and more about whether they govern responsibly – like, for example, former University of Arkansas System Trustee David Pryor.

Pryor is best known for being a former governor and senator. He’s a Democrat, for what that’s worth.

This column isn’t about any of that. Instead, it was Pryor who, along with current board member Cliff Gibson, voted in 2016 against a $160 million expansion of Donald W. Reynolds Razorback Stadium to 76,412 seats, including 3,200 new premium seats for rich people. The other eight board members voted yes.

Pryor opposed the project for several reasons. He argued that the university had higher priorities and that it wasn’t the right time to expand the football stadium. A big concern was the fact that the expansion was financed largely by a $120 million bond issue, ultimately backed by the state.

“A bond issue is a debt of the University of Arkansas,” he said in 2016. “It is a debt of the people of Arkansas, and ultimately if something goes wrong, who’s responsible? And that’s the people.”

So what could go wrong? Continue reading →

Debate questioners, please ask this

tax, taxes, debt, deficits, spending, trillion, State of the Union, deficit hawks, balanced budget amendment, Jonathan Bydlak, immigration, $98.8 trillion, $970 billionBy Steve Brawner, © 2019 by Steve Brawner Communications, Inc.

“As president, what would you do to balance the federal budget and reduce the national debt?”

That’s a simple, straightforward question about an important issue affecting every American. So it’s odd it hasn’t been asked once in 14 hours of Democratic presidential debates this year.

The candidates have been asked 374 questions so far, according to Fix the Debt, a project of the nonpartisan Committee for a Responsible Federal Budget. Not once have they been asked about the federal government spending $984 billion this past fiscal year that it did not have. That’s almost $3,000 for every American man, woman and child. Uncle Sam spent $4.446 trillion but only collected $3.462 trillion. The candidates have not been asked about the cumulative national debt, accrued over centuries, now being almost $23 trillion, or more than $69,500 for every American. They have not been asked about how to address the looming shortfalls in Social Security and Medicare.

The lack of questions is illustrative of the country’s collective blind eye regarding these inconvenient truths. The United States has been in debt since the Revolutionary War, except for a brief period in the 1830s when it paid everything off. But the debt has been growing exponentially in recent years. It took 210 years to reach $5.67 trillion by Sept. 20, 2000. The debt has grown $17.27 trillion since then. It was a little less than $20 trillion the day President Trump took office. It’s grown about $3 trillion in less than three years.

And yet the debt registers so little on the public consciousness that debate questioners haven’t felt compelled to ask a single question about it. It’s a problem but not a crisis – yet – and there’s always another crisis calling for immediate attention. We all know we can’t keep spending money we don’t have forever, but we also know we can probably keep doing it a while longer. So we’ll talk about something else for now. Continue reading →

Don’t tell them what comes after trillion

tax, taxes, debt, deficits, spending, trillion, State of the Union, deficit hawks, balanced budget amendment, Jonathan Bydlak, immigration, $98.8 trillion, $970 billionBy Steve Brawner, © 2019 by Steve Brawner Communications, Inc.

While the nation’s attention was divided between President Trump’s back-and-forth with Democratic congresswomen and Robert Mueller’s upcoming testimony, negotiators this week crafted a deal that may “end up being the worst budget agreement in our nation’s history.”

That description came from Maya McGuineas, president of the Committee for a Responsible Federal Budget.

The agreement was reached by President Trump’s Treasury secretary, Steven Mnuchin, and Speaker of the House Nancy Pelosi, and it was announced by an enthusiastic Trump tweet.

The deal suspends the federal debt ceiling until July 31, 2021 – after next year’s election. Suspending the ceiling wouldn’t necessarily be a bad thing under other circumstances; frankly, we probably need to ditch it permanently. It accomplishes no purpose other than creating periodic crises that rattle financial markets and make the United States look like it can’t get its act together.

The problem is the deal eliminates spending limits created in 2011 that actually did slow the national debt’s growth a little. Since those will be gone, we’ll spend an additional $320 billion over the next two years on both defense and non-defense expenditures – paid for by borrowing, as always. The Committee for a Responsible Federal Budget says the deal could add as much as $1.7 trillion to the national debt over a decade. Continue reading →