Moore: Exploding National Debt, Local Government Liabilities Will Doom Us All

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“Nobody Cares.” Chazz Palminteri, A Bronx Tale

There are two things that politicians care about: getting reelected and raising money.

And the latter only ranks because it’s so intricately tied to the former.

Tough decisions might be what’s best for everyone. But they don’t help a politician get re-elected. So they don’t make them.

That’s what crossed my mind on Monday morning when I read in the Wall Street Journal that the interest on the nation’s national debt is poised to crowd out almost everything important that the government should be doing–helping poor people, funding national defense, paying for infrastructure. https://www.wsj.com/articles/u-s-on-a-course-to-spend-more-on-debt-than-defense-1541937600

Over the last decade, the national debt has risen from $5.1 trillion to to $15.9 trillion. Since the world’s investors still see US Treasury bonds as “safe” investments, the US’s borrowing costs have stayed relatively low.

Tough Decisions

Why has this occurred? When the government spends more than it takes in through taxes, it needs to borrow the money to fund itself–no different than a degenerate gambler who turns to his credit card to pay his grocery bill.

Eventually, both have to pay the piper, and it’s never pretty.

Yet if current trends continue, and there’s no reason to believe they won’t, by the year 2023 the United States will spend more on interest payments for financing its national debt than on national defense. (The US spends more on national defense than any country in world.) By the year 2020, the US will spend more on interest than it spends on Medicaid.

People should realize that if we’re working a third of the year to pay taxes and the majority of that’s going to pay for interest alone that we’re working as indentured servants for huge portions of the year.

A Gargantuan Problem

Why do we have this gargantuan problem? The answer is simple. Politicians would rather kick the can down the road, and subsequently get re-elected, than they would make a tough decision that will benefit us all, and future generations, and then potentially get un-elected.

But they’re just responding to the actions of the masses. If we want to know the real culprits here, they’re all of us. We’ve met the enemy, and it’s us.

The national debt and local liabilities will force us to spend less on the things that matter.

The masses should be better. The voters should be throwing people out of office who refuse to make tough decisions–not the ones who will. We’ve created a perverse system that rewards cowardice. Most people believe the government is a reflection of the people in a democratic system. We know what that tells us.

Local Problems

If you think state and local governments are any better, you’re wrong.

Across the state, our schools are crumbling because politicians put off difficult decisions in order to keep the party going. In Warwick, for instance, retirement benefits have gone from 19 to 28 percent of the budget over the last 15-years. Over the last decade, almost every new tax dollar went to retiree and employee benefits costs.

For the same reason, the streets in Providence have more craters than the moon. The city cannot afford to pave roads since it has almost $2 billion in combined pension and health care liabilities combined. 

A Bi-Partisan Problem

These facts are true, in large part, due to the fact that previous politicians put off costs into the future, in order to stave off difficult decisions. It hurts now, but hey, they got re-elected!

And it’s a bipartisan problem. Republicans don’t want to hike taxes to solve the problem since they, correctly, believe it would hamper economic growth. And Democrats don’t want to do anything that could potentially shrink the government.

All this means that we will slowly see services deteriorate while we distract ourselves with bread and circus.

The only way towards recovery is admitting we have a problem. But that’s no fun. So we won’t.

And we’ll all act surprised when the crisis finally arrives.

Russell Moore
Russell J. Moore is the publisher and founder of rirelevant.com. He’s been writing about Rhode Island since 2005. You should definitely follow him on twitter @russmoore713. If you want to send him email, you can send it to russmoore713@gmail.com
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2 COMMENTS

  1. — Yes, True. Simple economics. Keynes said we could balance our economy by borrowing money to keep people working during the bad years. But did he forget to mention that we had to pay it back during the good years? No. We just forgot to listen. So we borrow all the time to stimulate the economy. Coffee is a stimulant. Drinking coffee is fine. You just have to sleep once in a while. Otherwise you die.

  2. When you stand up for fiscal stability, as I found out first hand, the powers will literally kill you and your entire family. People complain about taxes but still want all the perks.

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