For much of the past century, federal government spending has been out of control.
At the time of the Great Depression in the 1930s, the national debt was around $17 billion.
But with New Deal spending programs in the 1930s and initial preparations for World War II, the national debt rose to nearly $50 billion in 1941.
World War II was very expensive. Within a few years after the United States won victory, the national debt had risen to nearly $257 billion.
But federal deficit spending has accelerated in peacetime, too!
So Congress voted to establish a debt “limit.”
But government spending has continued to exceed even high taxes. So each time red ink has risen near the debt “limit,” Congress has simply voted to raise the non-limiting “limit.”
The legal debt “limit” today is $14.29 trillion!
Our national debt is now drawing close to that supposed ceiling again. Do you believe Congress will cut spending enough to stay below the “limit” this time? Or do you think it will raise the “limit” and continue to spend more?
We’ll see within a very short time.
Meanwhile, just interest on the debt is costing taxpayers hundreds of billions of dollars a year!
If we hit the debt “limit,” the federal government would be unable to pay the interest to the holders of U.S. Treasury bonds. Defaulting on our financial obligations is plainly undesirable, and Congress is not likely to let that happen.
But what will lawmakers do? Unfortunately, they probably will not do nearly “enough.”
Watch for early action in Congress to raise the non-limiting debt “limit.” But do not expect much corresponding congressional action to face, much less solve, our problem of excessive spending.
The result will be still more debt piling up.
There also will be a variety of other bad economic consequences — and, eventually, higher taxes.
Don’t you think the president and Congress should begin to address this terrible problem — now?
They should read the Constitution of the United States. They would find that a huge part of excess federal spending is actually unconstitutional. Noting that, they should take the difficult but proper action to begin to rein in our runaway federal spending.
Sadly, that scenario seems all too unlikely.