Ten years later, Daniels wrote a Washington Post op-ed in which he admitted abject failure. The national debt now stands at $27.8 trillion — doubling in a decade.
The past 10 years demonstrated neither of our political parties wanted to face unpleasant fiscal realities, nor did our past two presidents (Obama and Trump) have any interest in doing so. Conservative Republicans railed against Obama administration deficits, but the GOP failed to rein in spending even while in unified control of the federal government from 2017 to 2019.
When President Trump took office in January 2017, the national debt stood at $19.9 trillion. When he left office in January, the national debt had increased by 36%.
Trump made it clear he was not going to touch entitlement programs — Social Security and Medicare —and Democrats were an even bigger roadblock to fiscal reform.
Many Democrats now subscribe to a radical notion that there is no limit to how much money can be printed and spent, so-called “modern monetary theory.” It follows that deficits don’t matter at all.
In an emergency response last year to COVID-19, Congress on a bipartisan basis enacted five major bills totaling nearly $ 3.5 trillion to help manage the pandemic and mitigate the economic burden on families and businesses.
President Biden chose to go “straight party line” with a massive new $1.9 trillion spending bill. While making a show of listening to GOP senators, Biden and congressional Democratic leaders ignored the GOP and rammed their partisan $1.9 trillion plan through the House and Senate.
Polls showed their spending plan popular, being falsely promoted as “COVID relief.” In reality, the bill contains a blowout list of longtime Democratic spending priorities unrelated to the pandemic.
The nonpartisan Congressional Budget Office found that more than a third of the proposed funding —$700 billion — would not be spent until 2022, or later. It’s not urgent COVID aid.
Congress should target assistance to those who need it and speed the delivery of vaccines — not borrow hundreds of billions to satisfy items on Democrats’ political wish lists, or increase the nation’s debt and risk inflation.
The bill calls for $350 billion for states and localities. Yet, 21 states actually had revenue increases in 2020 and only a few are in financial distress. Sending out hundreds of billions of dollars to states regardless of need is both wasteful and harmful.
This Biden bill provides $170 billion for education but has no realistic plan to reopen K-12 schools. Congress has already provided $80 billion for education, yet $68 billion has not been used by schools and universities.
The CBO reports that only 4 percent of the K-12 spending in the Biden bill would occur in 2021, and some education and labor funds would still remain unspent in 2029.
On behalf of 10 Senate Republicans, Mitt Romney offered a $618 billion compromise with funds to expand COVID testing, accelerate vaccine delivery, reopen schools as well as support robust financial assistance for those impacted in their employment. Republican support was spurned and negotiations rejected.
Even liberal economic writers, like the Washington Post’s Steven Pearlstein, argue that borrowing and spending at these levels run the serious risk of overheating the economy and triggering a new round of inflation.
Federal debt has already risen into uncharted territory. Even without this new Biden spending, debt exceeded 100% of our GDP in fiscal 2020. That’s a level never reached in peacetime.
If inflation does result and interest rates normalize, then our mountain of debt becomes extremely expensive to service.
A giant credit and investment bubble may be on the horizon that would dwarf the 2008 financial crisis.
Jim Hartman is an attorney residing in Genoa. Email firstname.lastname@example.org.