Breaking the national debt barrier

A few days ago, the Washington Post gravely informed us that “…federal debt is set to exceed the size of the entire U.S. economy this year for only the second time since the end of World War II.”  What wasn’t said (but could be gleaned from the report’s graphic) was that debt was projected to remain above 100 percent of gross domestic product (gdp) every year from now until 2031, the end of the Congressional Budget Office’s (cbo) projection horizon.

It is also disturbing that cbo based the analysis the Post used as their source on current policy; that is, without including the additional $2 trillion that the leftist current administration is ramming through Congress under procedures that evade the proper examination and debate such a radical scheme should be subject to.  The President has spoken soothingly but has shed his sheep’s clothing to bring the wolf to the Treasury door.

The first thing the administration should do is get the monies already legislated to their intended recipients.  For example, there are $50 billion left earmarked for subsidizing state and local governments.  Just write a $1 billion check to every State; that would get even the Californians and New Yorkers to shut up for a minute and give Congress the chance to more carefully consider a plan that involves throwing another $350 billion into that rathole.

Under his administration’s current proposal, “Biden wants to send $350 billion to state, local and territorial governments to keep their frontline workers employed, distribute the vaccine, increase testing, reopen schools and maintain vital services.”  That all sounds peachy, but it’s money we don’t have in the Federal piggybank and is the State’s responsibility to raise for themselves.  So let’s see which of the wish list should really get Federal aid and put our borrowed money there.

Of the programs listed, the Federal government has done the most damage in the vaccine distribution crisis:  Slow recognition of the scope of the pandemic, an over-complicated test kit that failed and left us data poor for longer than could ever be excused, and another over-complicated planning framework for administering the inoculations.  Thus, we should be glad to help out with funding to distribute the vaccine.

As to the rest of the list, paying their employees clearly is the specific jurisdiction’s responsibility.  Increased testing has already gone past it’s use-by date.  Reopening schools is very much a local responsibility and the Federal government should try not to make things more difficult than it already has;  let’s see if the Department of Health and Human Services can issue meaningful guidance on something.  I’m not sure which “vital services” are covered in the proposal, but the most vital has already been covered under “distribute the vaccine.”

Prior to the current situation, the national debt barrier was only broken once; from 1945 through 1947, debt-to-gdp ratios exceeded 100 percent.  Today we are looking at 10 years of exceeding the debt barrier and it often seems like we are no closer to defeating this enemy than we were to defeating the Axis powers when the Marines landed on Guadalcanal in the summer of 1942.