Trump's First Budget Proposal

In April 2016, then candidate Trump told the Washington Post that he would promise to completely eliminate the U.S.' national debt over 8 years. (This of course assumed his re-election to a 2nd term.) His first budget proposal includes a 9% boost in defense spending, and deep cuts elsewhere.

Trump is proposing a 31% cut to the Environmental Protection Agency, a 28% cut to the State Department, & deep cuts in foreign aid, medical & scientific research, as well as anti-poverty programs that do things like provide free meals to children and the elderly. Trump would entirely eliminate federal funding for National Public Radio (NPR), the Corporate for Public Broadcasting, and the National Endowment for the Arts.

Trump's philosophy seems to be to shift the funding of many social programs to the private sector - let the philanthropists pay for it. I'm actually okay with that because I see that our current national debt of over $19 trillion is equal to more than $166,000 for every man, woman and child in America.  And it is still growing.  We have to make deep, painful spending cuts somewhere. The problem is that that's not really what Trump is proposing.

Overall federal spending under Trump's proposed budget still comes in around $4 trillion - about the same as in President Obama's last budget plan.  Moreover, the deficit (the amount by which spending exceeds tax revenue) would be about $559 billion under Trump - nearly the same as it was under Obama.  And the Trump budget doesn't do anything to curb the growing spending - or raise revenue to pay for the growing spending for Medicare, Social Security, and other entitlement programs that so many Americans rely on.

Trump's April 2016 pledge doesn't seem to be reflected in his budget proposal.  Don't you think it should be?  

I realize that Trump is already in for a fight.  He believes we're not secure, and by making these deep cuts he's freeing up existing spending for things like the defense departments and construction of a border wall between us and Mexico.  Already the liberals are crying foul, and the lobbyists are preparing to launch their attacks to persuade Congress not to let Trump have his way.  Based on their past behavior, I have no confidence that our Congress has the courage to make deep spending cuts anywhere.  My guess is they will either not let Trump have his defense increases - or they will just borrow more money to pay for it. 

It's even more frightening to consider the prospects of our national debt, when the Republicans are promising tax cuts.  In the face of our national debt and deficit spending plans, they think American corporations and individuals should pay less taxes.  I know there is a much-beloved theory that if we make tax cuts they will stimulate the economy and more taxes will actually get paid.  I haven't actually seen that work.  Ever.  Not in my lifetime anyway. 

While I'm not an expert on world history, I am a student of it.  And so far I'm not aware of any country that has been able to make that work either.  In all the history of the world, it seems that governments must tax their people in order to pay for what they do.  No one has ever been able to cut those taxes and actually pay for government spending.  Not in the history of the world.  And many governments have actually collapsed under the weight of their own spending (and inability to raise the tax revenue.)

Its not inconceivable to me that the U.S.' national debt could top $40 trillion or more before Trump's maximum term of eight years in office.  I remember when Obama took office.  Our national debt was already in the stratosphere.  It was breathtaking.  I could not imagine how our country could go on borrowing.  I honestly feared our whole economy could collapse if the national debt got any worse.  But Obama, and our Congress, had a different vision.  We continued our wars, our liberal social programs, and even implemented a costly health care plan.  The government spending and borrowing continued unabated for eight more years - and the national debt more than doubled. 

Here's the thing I know.  It is expensive to be America.  We have made ourselves the world's police force - moving literally on every continent to fight for freedom and democracy.  We have made ourselves the world's benefactors - shipping humanitarian aid to every continent when there is need.  We have made ourselves the freedom fighters, propping up regimes that we view as righteous, providing foreign aid to the tune of billions to countries like Israel or Egypt.  And of course, we are not willing to say no to our own people.  So we allow the people to vote themselves all sorts of benefits - by sending representatives to Washington who will work to give them what they want.  (Politicians often point to their record of "winning" federal money & program support for their own geographic constituents.)  All of this is expensive. 

Like I said, it is expensive to be America.  And so I wonder how we can move forward if we don't both make deep spending cuts AND commitments to pay more taxes.  When will American individuals and corporations decide that it is worth it to pay our own way?  When will we be willing to make the hard financial choices in order to reverse this collision course with reality?

What are YOUR thoughts about this?

American Challenges

With all the people marching in the streets around the world, trying to get their government leaders' attention, I'm wondering if Americans ought to join in. After all, there are some things we'd like to call our government's leaders' attention to. And for the life of me, I cannot understand how the politicians that we elect in Washington, DC can wander around acting as if life is normal when we have massive threats to the sovereignty of our country looming over our heads. Call me a pessimist, but some of these things just have to be addressed. Now.

Let's start with the national debt. As of this week, it stands at $14,123,589,307,190.50. If we divide that by the approximately 300 million people that comprise the United States of America, it equates to about $47,078.63 for every man, woman and child alive today. How many people live in your household? Multiply that times this amount and you can see what your personal share of the burden is.

Of course it is the largest national debt number ever known to any state in the history of the world. But if that's not an attention getter, there are more practical aspects to this dilemma. For example, the current interest expense on this national debt is equal to about 10% of all government spending. Said differently, 10% of all the money the government spends is being used to pay interest on the national debt.

Now keep in mind that what our government spends is not equal to what you pay in taxes. So this 10% number? It's considerably more than the amount you pay in taxes. In fact, the government will spend, just this year alone, about $1.5 trillion more than it will receive in tax revenues. So just like the cartoon, we really are borrowing from our MasterCard to make the payments on our Visa card!

The U.S. faces two huge problems right now that really are linked. Our unemployment rate is hovering at about 9.4%. But once you add in those who want full time work but can find only part-time jobs, it is almost twice that (or about 18%). Job creation is not even keeping pace with the rise in population. And the budget deficit is running at almost 10% of gross domestic product (GDP). What that means is that the amount of money our government needs to borrow this year to keep the lights on is about 10% of all the money that will be made in the whole country this year.

But the first couple years of Obama's presidency, he and his administration largely focused on health care reform. Is that really the most seriously pressing issue? I don't think so. Now Obama referred to our currently dilemma (i.e., lack of innovation, lack of progress, etc.) as a "Sputnik moment." He was recalling the time back in 1957 when the U.S. realized that Russia had just out done us on the space program. So we surged forward with major investments in infrastructure, education, space exploration, etc.

And Obama wants to call our nation to do the same now ... surge forward with massive investments to ensure that America remains the leading super power globally. The only problem is that back in 1957, the U.S. government had piles of cash to spend on catching up. Now it has none. In fact, we owe everybody and can't even maintain our mediocrity without borrowing heavily from both our friends and our enemies in the world.

Perhaps the thing that disappoints me most about how our government leaders are failing us is that they are allowing Americans to continue living in denial. Just once I'd like to see a politician go on national TV and tell us that we have to pay more taxes. A lot more. These freedoms that we all hold so dear? This country that we're all convinced is the greatest on earth? It turns out they are considerably more expensive than anyone thought.

I love the United States. Perhaps it is the greatest country on earth. But frankly I can't enjoy something nearly so much if I don't own it. And Americans are fast losing our ownership of these freedoms and riches that we hold so dear. Unless we pony up and start paying a lot more taxes than we're paying now, we could lose everything that we hold so dear. It'll be foreclosed on by our creditors. Talk about a foreclosure crisis!

The first step is for Americans to get educated. It's clear (at least to me) that our government and its leaders aren't willing to tell us the truth about the situation at hand. Fortunately Peter Peterson has plowed a bunch of his wealth into a foundation that is dedicated to educating us, equipping us and calling us to action. You can check it out and join the cause at http://www.pgpf.org/.

I urge you, if you really love this country and value our freedoms, then go get the facts. Find out how expensive this way of life really is. And let's start having a national dialogue on how we're going to pay for it.

National Finances

With the current financial crises, it seems that the U.S. government (among other western governments) is stepping up to fill the financial holes in lots of things. Bailing out this or that, subsidizing this or that, guaranteeing, buying and even seizing companies and industries. The market tends to react favorably. This week, when the government stepped up to put hundreds of billions more into Citibank, the stock market rallied impressively. Clearly Wall Street was happy to see the U.S. government shelling out hundreds of billions on Citibank. It must have made the market feel secure.

But is it really true? Is it a fact that the hands of the U.S. government make something safer? Does the government really have that kind of money at its disposal? Will the government really have to pay these bills it's putting its name on? If so when? At what cost? I suspect that many Americans just don't have a clue as to the real answers to questions such as these. But the government is huge, the numbers are abstract, and it seems to take care of a perceived need. After all, Citibank was "too big to fail." But let me ask you: Is the U.S. government too big to fail?

I don't make a habit of endorsing the web sites or blogs of other people. But today, I'm going to make an exception. I encourage you to visit http://www.pgpf.org/ immediately. It is the web site of the Peter G. Peterson Foundation. Mr. Peterson is still alive; he's the founder of the Blackstone Group, a well known and well funded investment house. He's also a billionaire who is pouring most of his wealth into fighting problems that he thinks threaten the very foundations of America. I think he's right.

I have blogged before about the National Debt. It is a larger debt than has ever been known in the history of the world. The Peterson Foundation provides a quick education about what that looks like and what it means. They assemble facts from various sources (all of which they identify) and simply provide the education for you to know the truth. If you agree with Mr. Peterson that the issues are important and deserve to be addressed, then the web site tells you how you can get involved and join Mr. Peterson in fighting these grave threats.

I know, I know --- nobody likes to talk about problems or the national debt. It's too big to understand and solving it seems to complex for my simple mind. So I'll just not worry about it and try to be happy. Well, that may work if you plan to die in the next few years. But if you plan to live in this country for a few more years or have loved ones that do, this concerns you. Please, go visit the Peterson Foundation web site. Get a quick education about the facts and then look me in the eye and tell me that this isn't really that big of a deal.

National Debt

Call me a worry wart. Call me a pessimist. Call me someone who "just doesn't get it." But please - call me and explain to me why America shouldn't be worried about our national debt. I really would like to understand.

With the presidential elections underway and the political mudslinging, I wonder if we have even identified the real issues to argue about. Is America selling its soul to the devil? Can democracy really work in the long run? Why can't the United States pay its own way in the world without a vicious addiction to credit? And isn't it ironic that while we don't talk about these things, America is in the midst of a "credit crisis!"

Let's take a look at some facts about the federal debt of the United States. (Keep in mind we're not talking about any debt that states, counties, cities or townships carry.) As of today, the federal government of the United States is in debt to the tune of $9,352,044,096,140.51. That's more than $9 trillion - in case you've never seen a number that big

So how much is that? Well, it equates to about $30,769.76 for every man, woman and child alive in the United States today. Can we pay it off? Ever? Well, for more than 40 years, we've not paid a cent on the principal. For more than 40 years we have just borrowed more each year. We pay the interest of course - and borrow more.

Speaking of interest, isn't it expensive? According to the U.S. Treasury (http://www.treasurydirect.gov/govt/rates/pd/avg/2008/2008_03.htm), the average interest rate on the outstanding forms of debt at the end of March 2008 was about 4.215%. So how much is that? It equates to an annual interest payment of about $1,296.95 per year for every man, woman and child alive in the U.S. today. Put another way, it costs the U.S. government $394,188,658,652.32 in interest this year (as the debt grows, the interest payments grow each year as well). In 2008, our government will spend $1,079,968,927.81 every single day paying interest on its debt. Put another way, that's $44,998,705.33 per hour!

Folks, do you get the sense that we're talking about real money here? Do you know that an increasingly substantial portion of this debt is held by governments that are not our allies (like China's central bank)? I don't know about you, but I for one think this needs to be an issue for national discussion.

Quite frankly, the national debt scares me even more than its numbers. I know we are borrowing more every single day just to keep America humming along "like normal" - if there is such a thing. I know that we're in the midst of a very expensive war that is far from over. I notice in the papers that our government is financing the bailout of the mortgage industry - much like it bailed out the S&L industry a few years ago. I know that our Social Security administration is heading for a massive bailout before it collapses and leaves our elderly on the streets in a few years. I also realize that the world is getting more hostile and that we could end up in the middle of more costly wars in the not-too-distant future.

Are we ready, America? Do we have our ducks in a row? Are we ready to sail into the future, confident, prepared and strong? Or are we limping along like lame ducks ready to be picked off by our enemies. Our transportation infrastructure is crumbling. Our economy is on its knees as the Middle East sucks the cash out of America to finance its dream (and build more Islamic mosques in America). Frankly, it seems like this would be a good time to be ready for just about anything.

Mrs. Clinton, Mr. McCain, Mr. Obama, Mrs. Pelosi, Mr. Cheney - can any of you explain this to me? Do any of you have answers or have a plan to get America strong and sturdy? In my lifetime is it unrealistic to think that America might live within its means and begin to pay back some of this national debt?

I'm just a man who loves his country and has some questions here. So call me naive. Call me a pessimist. But please - call me - with some answers.