I'm at the point now where I want the budget balanced and the debt paid done. I don't care if this is done by raising revenue(i.e. raise taxes, raise tariffs, sell government property, etc) cutting spending or a combination of the two.We hold these truths to be self-evident: the current debt is huge but sustainable as long as interest rates remain reasonably low. The basic strategy is to grow the economy, reduce both the current deficit and debt service as a share of GDP and the budget, and in principle eventually balance the budget and begin to pay down debt. That's good government 101, to which Republicans have usually pledged at least nominal support while the Dems merrily ride the bankruptcy express. Too many people have grown blasé about the problem because it is perceived to be a far-off threat.
BUT: If interest rates rise to historic norms, debt service will rise with them. This could happen rapidly. When debt service exceeds a trillion dollars a year -- which federal borrowing rates in the range of 6-8 percent would produce -- we will have extreme difficulty servicing the debt. There will be draconian spending cuts, probably starting with the military, followed by huge tax increases which will slow the economy. This is, roughly, the PIG problem. We are headed for it. Politicians have been kicking the can down the road for decades. Now and again someone, invariably a Republican, tries to seriously cut spending. The Gingrich-Armey House GOP actually balanced the budget for a couple of years, but the dot.com recession knocked us off course. That brief moment of success was already a generation ago, with a much smaller annual deficit and accumulated debt.
Trump has simply followed the default option of ignoring the problem, on the theory that someone else will have to deal with it when the trainwreck occurs.
That is the simplest part of the problem. It is dwarfed by the staggering unfunded liabilities of our promised entitlements, principally Social Security, Medicare, Medicaid, government pensions and assorted other smaller entitlements. We continue to drift towards the point at which Social Security, Medicare and Medicaid alone will consume 100 percent of federal revenues -- a theoretical point of inflection since the system will collapse long before we get there, but an inevitability on our current course. Either we reform entitlements or we go bankrupt. This is how the United States becomes Venezuela. The Gingrich Republicans made a frontal assault on the healthcare disaster, and Bush 43 tried on Social Security. They failed but they were on the correct path in both instances. Trump has never evinced the slightest interest in either question.
The Democrats fully intend to ride the train into the ditch, making short-term politics against periodic Republican attempts to avert bankruptcy while privately anticipating the day when systemic collapse presents their long-awaited opportunity for total government control. They expect to be the winners as government steps in to ration scarcity in the name of fairness.
Trump seems oblivious to the problem. Does he understand that a country going bankrupt is not like a hotel or casino project going bankrupt? You cannot go through Chapter 11 and restructure debt when the banking system itself is in collapse and the currency is worthless. But hey: it's going to be someone else's problem.
Trump isn't a conservative. He's never been one. He didn't run as one.
I'm at the point now where I want the budget balanced and the debt paid done. I don't care if this is done by raising revenue(i.e. raise taxes, raise tariffs, sell government property, etc) cutting spending or a combination of the two.