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Is $10 Trillion in New Debt Coming as Republicans Take Control?

Is $10 Trillion in New Debt Coming as Republicans Take Control?

As Donald Trump readies to take the oath of office next week, he will not only assume charge of the most powerful nation in the world, but he will also oversee the world’s largest economy.  And Trump will be aided in his oversight of our economy by a Congress controlled by a Republican Senate and Republican House. 

It’s been ten years since our nation was led by a Republican-controlled trifecta (Presidency, Senate & House). The last time this occurred George W. Bush was President.  When the “conservative” Bush left office in 2009, with Republicans having controlled the Senate and House for half of Bush’s eight years in office, our 43rd President had doubled the national debt to just over $10 trillion with his deficit spending policies. 

Eight years later though, as Barack Obama is leaving office, our published national debt is on the verge of surpassing $20 trillion. (I say “published” debt since our unfunded liabilities exceed $100 trillion, a topic that I discussed in my previous article, American: The Point of No Return?)  If ever there was a financial house that is spinning out of control, it is ours.  

Many in America are hopeful with our new President about to take office.  Trump’s no-nonsense, tell-it-like-it-is attitude attracted tens of millions of voters to support him.  His willingness to say what many were thinking no doubt won him the election.  Further, Trump’s 50 year track record in business convinced many voters that he was the man to turn around our economy and create a thriving, fiscally sound America.

Donald Trump: The $10 Trillion Man?

But this last week, Senator Rand Paul took to the Senate floor to rail against his own Republican colleagues as seen in this powerful video.  According to Paul, under the plan to repeal Obamacare, Republicans will likely be voting in favor of a budget that would increase the nation’s debt by another $10 trillion over the next ten years, matching Obama’s own dismal performance.  This slide from Paul’s presentation illustrates the point the Senator was making.  

Senator Paul began his speech with the famous lines, “the more things change, the more they stay the same.”  And he could not be more accurate.  For all the talk of “draining the swamp” in Washington, what may stay the same, based on Republican’s track record, is the unwillingness of Republican politicians to stem the growth of our dangerous national debt.  (To be fair, some are suggesting that this “shell” budget will be replaced with a second one in the not too distant future, which will bring spending down and ultimately balance our nation’s budget.  But that remains to be seen and should be viewed with extreme skepticism.)

Republicans were fond of lobbing threats of government shutdowns, making incessant demands for balanced budgets and excoriating Obama and Democrats for their own deficit spending during the Obama era.  And rightly so.  But now that they are in the drivers seat, is it actually possible that Republicans will do no better?  Will they maintain the fiscally ruinous course upon which our nation is set?

Where are the Tea Party & Fiscal Conservatives?

Eerily silent as the Republicans take control of Washington, are the groups that heretofore have been the voices of fiscal reason, and have historically led the way in demanding that our elected officials spend no more than they collect in revenues.  And their silence is deafening.  

The tea party movement, of which I have been an active part since its founding in 2009, all but abandoned its defense of fiscal soundness, during the general campaign in 2016.  Tea Party Patriots, the nation’s preeminent coalition of tea party members and groups, and many other conservative watchdogs, said nothing about Trump’s calamitous economic plan.  This despite the fact the new President’s plan could add up to $20 trillion to our nation’s debt, according to a recent study by Committee for a Responsible Federal Budget.  Their report revealed that our nation’s federal debt would soar to $39.5 Trillion by 2026, double the current debt.  

But now the day has arrived and Donald Trump and his Republican allies have been handed Washington to them on a silver plater by frustrated and angry voters.  Those voters elected Trump because of their disdain for politicians who consistently promise one thing but deliver something altogether different.

A Call to Action

We’ve all been told, “it matters who governs.”  But it will only be true if grassroots Americans do more than simply vote.  They… or we must remain engaged.   Our voices must be heard in an unprecedented, unmistakable, and unambiguous manner!  Trump and our Senators and Representatives must know that they were not elected to maintain the fiscal status quo.  

The Tea Party, and all fiscally conservative Americans, must, like Rand Paul, call out Republicans and Donald Trump. We must warn them that they were not elected to put the final nail in our fiscal coffin.

Trump cares not about the media, the social elite, the Hollywood snobs, or the connected wealthy, as he once again reaffirmed this week in his most recent press conference and barrage of tweets.  But I do believe there is one demographic to whom Trump will listen: the grassroots, the blue collar workers, the forgotten middle class, and the traditional American, who still believe that if you work hard and play by the rules, you will be rewarded.  

So it is incumbent on you and me to reach out… once again, to an elite ruling class.  It is necessary for us to remind them that we sent them to Washington to repudiate the status quo by restoring fiscal responsibility; honoring the Constitution; and empowering the free market.  Reestablishing these three pillars, which are the core values of the tea party movement, will enable our great ship of state to slowly but surely reset its course in the direction of real prosperity, the kind that our Founding Fathers envisioned.  But as we do the work to reshape our nation, let us never forget that fiscal prosperity will only flow from men and women of decent, moral character.  And we will only “Make America Great Again” if we first Make America Good Again, as I discussed in my previous article of the same title.  

So will you join me in engaging with our elected officials?  Will you pick up the phone and call, or fire off an email to Donald Trump, your Senators & Congressman to express your views about the upcoming budget battles?  I trust you will.  (Click on the highlighted links for their contact info.)  

The National Debt: How America’s Festering Cancer Will Affect You

The National Debt: How America’s Festering Cancer Will Affect You

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With the election of Donald Trump, roughly half of Americans are hopeful, while the other half are dejected, if not alarmed and angry.   While that may be a slight overgeneralization, we can probably all agree that the campaign leading up to the Presidential election was one of the nastiest in recent history, characterized by intense personal attacks, with little attention given to the many challenges our nation is facing.  One such challenge is our exploding national debt and its dire implications for you and me.

As someone who has been a fiscal conservative all of my adult life, I was sorely disappointed to see such little attention given to the financial welfare of our nation.  With our nation approaching $20 trillion in current debt, it should come as no surprise to anyone that a financial storm, like none we have seen, is likely in our future.  Yet, neither Trump nor Clinton spoke much of our debt.  When it was mentioned, it was simply noted in passing, with no plan by either candidate to halt, much less reverse, the current course we are on.

While it’s understandable that neither candidate was interested in tackling America’s festering cancer, what is alarming is the fact that many of the organizations who have typically decry our national debit, remained silent during the campaign.  As the founder of the Chattanooga Tea Party, our organization locally, along with the national tea party movement, has consistently focused on fiscal issues over the last seven years.  Likewise, the Republican Party has historically been the party of fiscal responsibility, if not in action, at least in words.  

Yet nationally, both the Tea Party and the Republican Party said very little about the silence of both Hillary and Trump concerning our fiscal nightmare.

With reference to our national debt though, the old adage, ignorance is bliss, does not apply.  In fact, choosing to ignore what is certain to cause calamitous events in the not too distant future, is akin to knowing one has cancer, yet discussion of the illness is avoided, hoping it will somehow go away.

So just how bad is our fiscal cancer?  

Just as a picture is worth a thousand words, the following three charts illustrate the magnitude of our $19.5 trillion debt. To be certain the terms are understood, deficits are the annual differences between what our government takes in versus what it pays out, or spends.  The gross debt is the cumulative sum of those annual deficits.

 Chart #1: The Gross Public Debt from 1980 – 2016
chart-1-gross-public-debt-1980-2016-bar

Chart #2: The Federal Deficit from 1980 – 2016
chart-2-federal-deficit-1980-2016-bar

Chart #3:  Trillion Dollar Deficits Return by 2024
chart-3-cbo-crfb-projected-deficits

As the charts depict, for decades our nation has been spending well beyond its means.  In fact, during the last two Presidential administrations, the US incurred an approximate $15 trillion of new debt, with nearly two-thirds of that amount being added during the Obama era.  

According to an article at Visual Capitalist, our national debt is:

  • Larger than the 500 largest public companies in America.

  • Larger than all the assets managed by the world’s top seven money managers.

  • 25x larger that all the global oil exports in 2015.

  • 155x larger than all the gold mined globally in a year.

  • Larger than the sum of the world’s physical currency, gold, silver, and bitcoin combined.

But as troubling as this should be to any American, the future looks even worse according to the Congressional Budget Office (CBO) projections, as presented by the Committee for a Responsible Federal Budget.  CRFB is a nonpartisan, non-profit organization committed to educating the public on issues with significant fiscal policy impact. 

To quote CRFB, “under CBO’s current law baseline, annual deficits will return to trillion-dollar levels by 2024. Under a more pessimistic Alternative Fiscal Scenario in which policymakers fail to pay for new spending and extended tax cuts, trillion-dollar deficits return to 2021 and reach $1.5 trillion — a nominal-dollar record — by 2026.”

Despite the magnitude of our debt, there have been some who have suggested that our soaring debt is no big deal.  Rather, they have asserted that debt is good, particularly when interest rates are at historical lows.    

In contrast to that view though is that of Admiral Mike Mullen, former Chairman of the Joint Chiefs of Staff, who in 2011 stated,

“the single, biggest threat to our national security is our debt, so I also believe we have every responsibility to help eliminate that threat.  A nation with our current levels of unsustainable debt… cannot hope to sustain for very long its superiority from a military perspective, or its influence in world affairs.”

Every budget is finite, even one as large as our federal government’s, which is now approaching $4 trillion per year.  So as certain components of that budget increase, they either crowd out other line items or they demand greater borrowings to meet the shortfall caused by deficit spending.  

Our nation has enjoyed historically low interest rates for a number of years.  But when those interest rates invariably rise, so will interest costs.  In fact, the CBO projects that those rising interest rates over the next ten years will increase the federal interest costs from $223 billion in 2015 to $839 billion in 2026.  This will lead to fewer dollars available for other essential government programs, including the military, Medicare, Social Security, infrastructure and more.  

Chart 4: Projected net interest expense, in billions of dollars & as a % of total outlays 
projected-net-interest-expense-in-billions-of-dollars-and-as-a-percentage-of-total-federal-outlays-2015-2026

So just how does a government that has an insatiable appetite for spending, and has shown no restraint to borrowing funds, affect ordinary citizens like you and me?  Here are just a few of the ways:

  1. Economic growth is threatened as national debt increases.

  2. Wages are depressed and the availability of jobs is minimized.

  3. The stability of Medicare, Social Security and Medicaid is jeopardized.

  4. Personal costs of living increase as interest rates on individual credit ratchet up.

  5. Burden for repayment of nation’s overspending today will be heaped on our children and grandchildren tomorrow.

  6. As debt increases and spending accelerates, likelihood of another financial crisis increases, endangering personal wages, jobs, and investments.

As I mentioned at the outset, half of Americans are hopeful and even optimistic about what a Trump Presidency portends for the days ahead.  But with great opportunity comes great responsibility.  So as Republicans maintain control of both houses and gain the White House in January, how will they behave?  Will they move the country forward in a manner that acknowledges the threat of our growing debt?  Will Republicans guide our government and nation back in the direction of fiscal solvency?  Or will their new found status in Washington reveal what they have done for too long now, campaign on grandiose promises that fall short on delivery?

Time will tell.  But one thing is for certain, the longer our fiscal cancer is ignored, the more likely the ultimate diagnosis will be one from which we may never recover.  If you care to weigh-in on this matter, be sure to let your Congressman and Senator know that you expect them to support plans that will move away from deficit spending and toward a balance budget.  While it cannot be done overnight, the road back to fiscal responsibility must begin in 2017 under a Trump administration.

Addendum:  While this article focused on the current portion of our national debt, there is a much larger amount that receives very little attention, referred to as the nation’s “unfunded liabilities.”  These amounts total in excess of $100 trillion and represent the sum of the various obligations that will come due over the next several decades, predominantly made up of Medicare and Social Security, as the demographics of our nation continue to age out and draw more heavily on these programs.  To find out more about this avalanche of debt, google “unfunded liabilities.”

Mark

Exit Your Echo Chamber To Make a Difference

Exit Your Echo Chamber To Make a Difference

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Have you ever found yourself in a deep cavern or in a valley surrounded by mountains? If so, you’ve probably played the echo game, where you shout loudly and hear your returning echo. We’ve all done it. And what we hear back is exactly what we yelled.

Nothing new. Nothing extraordinary. Just the same message we uttered moments earlier.

Imagine for a minute though that listening to your echo was the only form of communication in which you engaged. Not only would your subject matter be limited and grow redundant over time, but you would never learn anything new.  The content of your echo would be limited to the extent of your own knowledge and understanding.  Soon your mind would begin to atrophy from the lack of new knowledge or truths.  I call this the Echo Chamber syndrome.  

As I observe our society, and have pondered my own behavior at times, I have seen Echo Chambers dominating our culture, often amplified on social media.  They are formed based on one’s ideological, political or religious views.  Our nation has become so divided that we have segregated ourselves into subgroups whose values, views and perspectives are seldom at odds with our own.  

This Echo Chamber syndrome reveals several truths which are not only alarming, but are contributing to an increasingly divided and hostile culture.

1.  Echo Chambers eliminate the potential for any outside ideas or solutions.  We already know that yelling in a cavern returns the precise message as the one you uttered.  So if you’re looking for new ideas or solutions to the problems you are facing, you will get none.  Instead, the solutions within your Echo Chamber will be limited by your own ideological perspectives. Perhaps you’re ok with that, thinking that those outside your little tribe couldn’t possibly offer anything of value.  But if you possess that view, then you have just validated the next truth about Echo Chambers.

2.  Echo Chambers are elitist in nature and pose the ultimate example of arrogance and superiority.  As I’ve engaged with folks on both sides of the ideological fence, including conservatives and liberals. I’ve found that they share very similar attitudes.  First, they believe their perspectives are superior to all others.  Period.  No other view counts.  Second, folks on both sides of the ideological fence view anyone outside their belief system with skepticism and disdain.  Third, they posit that those who are outside the confines of their little chamber are inferior and not even worth getting to know.  It’s as if the other side has a contagious disease and we must not have any contact with them, at least not in the context of an engaging dialogue. But that attitude leads to the next truth about Echo Chambers.

3.  Echo Chambers reject the idea that we can “reason together” and find areas of common ground.  Individuals who spend their lives in an Echo Chamber indirectly affirm the idea that sharing time with those who have differing views is hazardous to one’s own ideology.  They believe that there is no common ground with millions of individuals on the “other side.”  Period.  So why waste one’s time even attempting to do so?  But embracing this flawed thinking leads to another sad truth of Echo Chambers.

4.  Echo Chambers discourage the forging of new relationships with those outside our little network.  If conversations foster relationships, which in turn grow trust, there is no wonder that our nation is so divided.  The mistrust is at an alarming level.  And yet, there is a rather simple solution to breaking down those walls of distrust.  Conversations.  And no I’m not talking about everyone holding hands and singing Kumbaya.  Conversations can oftentimes expose areas of absolute disagreement, but, if done in a respectful manner, simply having the dialogues can increase respect for each other.  As that occurs, relationships begin to form.  But without relationships, this next reality of an Echo Chamber, perhaps the saddest, will prevail.   

5.  Echo Chambers are completely ineffective for sharing truth to those without the truth.  If you believe you have the truth, whether it is the political ideology you embrace, or even the spiritual faith you practice, there is no greater way to hide that truth than to remain in an Echo Chamber.  Those in your little chamber already have the truth as you see it.  And so to remain in your little tribe results in many others never coming to know the truth.  This verse in Scripture reminds me of this reality: “No one lights a lamp and then puts it under a basket. Instead a lamp is placed on a stand, where it gives light to everyone in the house.” (Matthew 5:15)  If you want your truth to be heard, then get outside your Echo Chamber and share it with those who have yet to hear or understand it.

I can already hear some saying, “yeah but the ideas of the other side are not only wrong, they are dangerous.”  For a moment let’s assume that is correct.  The “other side” is no doubt comprised of a few leaders and many followers.  It’s likely that the leaders are incapable of changing their dogma.  But the followers are less assured and may be willing to entertain sound arguments, particularly if they are presented in a safe and engaging dialogue, that is shared within a growing relationship.  Those followers will never hear your truth if you regurgitate your message in your little Echo Chamber. 

So for the sake of expanding your understanding of truth, and your own mental growth, I encourage you to exit your Echo Chamber.  Begin making a difference by developing relationships that are based on mutual respect and honest dialogue.  As you do this, I believe it can break down the walls that have served to divide us all.  And who knows, you may even find that your perspectives were not so flawless after all.

Mark

The Drought Offers Common Ground: #PrayForRain

The Drought Offers Common Ground: #PrayForRain

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Photo credit: Derek Daniel http://bit.ly/2fFj186

Democrats/Liberals and Republicans/Conservatives can’t seem to agree on much these days. And probably a lot of the reason for that is because we are so focused on all the things that divide us, and many of those issues are in Washington. Donald Trump and Hillary Clinton have served to drive a wedge further into a division that was already deep to start with.

But, I believe that a time of crisis can, or perhaps should, drive us to find what unites us, rather than belaboring what divides us.

There is a dire crisis our community is facing. It is a crisis of rain, or lack thereof. We are facing one of the worst drought in years. This is a crisis that affects us all.  

Black. White. Democrat. Republican. Woman. Man. Rich. Poor. Gay. Straight.  

It matters not who you are, where you live, or the balance in your bank account. While Obama winds down, Trump revs up, and Hillary moves on, we have an urgent need for rain in our region.

So in this time of crisis, where neighbors’ properties are consumed, health is impacted, agriculture and farming are threatened, and first responders are working feverishly, can we as a community draw together? Can we begin to call out to God? Can we reach out to our friends, neighbors and co-workers, regardless of our backgrounds or political views, and drop to our knees, bow our heads and #PrayForRain?

Can we focus on that which we agree? Can we as Chattanoogans (or whatever town you live in) come together on this issue? Can you imagine if we all began doing this as a community? Singularly, then in small groups, in our churches, and perhaps even across our entire community? What if our elected officials, on both sides of the aisles, came together to pray? What if pastors of all denominations, including the black and white community, united in prayer? What if corporate executives and front line workers began to pray together? What if those neighborhoods that are being shattered with violence came together to pray? What if broken families were reunited in prayer?

What if we are experiencing this drought to unite us in prayer? To turn our hearts and minds back to God. To seek God’s forgiveness where we have failed Him. To find God’s strength and direction to move forward. To break down the walls that have divided us for too long.

If so, then what could we expect, if we turn to God in prayer?

Perhaps we could see God smile as we work to unite versus remaining so divided. And perhaps God’s pleasure might be revealed as His tears of joy flowed down in showers of blessings.

I am reminded that God said in Psalm 133, “How good and how pleasant it is for brethren to dwell together in unity!” And just two verses later in the same passage we read this relevant description of unity: “It is like the dew of Hermon, descending upon the mountains of Zion.”

Do we want unity that is like dew in this time of drought?  

Then why don’t we as a community draw together in unity to #PrayForRain?  

And as we do, perhaps the unity that so many of us seek will be revealed as we see God work in a mighty and powerful way, because we know that #PrayerChangesThings

Will you join me?

If so, then begin praying, and inviting others to join you. And share this article with others, using the hash tag #PrayForRain, as we acknowledge God’s omnipotence and seek His forgiveness and blessings in our community.

Mark

Photo credit:  Derek Daniel:  http://bit.ly/2fFj186