Tuesday, January 02, 2024

Even the Liberal New York Times Sounds the Alarm about the Federal Debt

by Rod Williams, Jan. 2, 2023- We're rolling downhill like a snowball headed for hell. 

I have a gloomy outlook for the new year and beyond. This may be a year of political violence. We may have an election in which half the country does not accept the outcome. Our faith in Democracy is faltering. 

In foreign affairs, an isolationist mood in the country may mean America abdicates its leadership role in the world. A Russian victory in Ukraine may occur and that may lead to additional Russian aggression and drag us into a war to defend a NATO ally. It is doubtful we are up to the task of challenging Chinese aggression. We no longer have the industrial capacity to be the "arsenal of democracy." 

With approximately two million foreigners a year pouring across our open southern border, many of them being from nations which wish us harm, we are ripe for a major jihadist terrorist attack. The threat of nuclear exchange appears to me to be as great as any time in our history. The list goes on.

One of the threats to our national security which does not get a lot of attention is the threat to our national security caused by our growing national debt. One glimmer of hope is that this is now being recognized as a serious threat. Even liberals are waking up. Those of you who read the conservative journals of analysis and opinion know it is threat. The Economist, The Wall Street Journal, and a few other publications, and organizations like Committe for a Responsible Federal Budget provide the data and explain the problem. Even we who know it is serious problem, have heard it for so many years that we become somewhat jaded.  Now however, even the tax and spend liberals are realizing that our current debt trajectory is not sustainable.

Writing in today's New York Times, German Lopez writes the following: 

The federal debt starts the new year at a level that is hard to grasp: $34 trillion. That is 1.2 times the U.S.’s annual economic output. At the end of World War II, the ratio was only about 1.1.

Both parties have contributed to the situation. Republicans have passed large tax cuts. Democrats have enacted ambitious climate and health care initiatives. Both funneled money to Americans in response to the Covid pandemic.

For years, many economists believed the country’s debt was not a problem. Interest rates were low, which held down debt payments. Inflation was also low, which suggested the debt wasn’t hampering the economy. If anything, additional government spending helped create jobs when unemployment was elevated for much of the 2010s.

But times have changed, and federal deficits now look scarier.

The author quotes liberal's favorite economist Paul Krugman as saying, “Serious deficit reduction, a bad idea a decade ago, is a good idea now.” I would disagree that serious deficit reduction was ever a "bad idea," but at least someone to whom liberals with listen is now saying serious deficit reduction is a good idea.

For a New York Times columnist to say federal deficits are scary is a sea change. It is not just this one article, but I have been seeing a change in tone from other liberal voices. It is encouraging that liberals are starting to see the problem. Unfortunately, at the same time liberals may be waking up, what passes for conservatism today may be retreating in concern about deficits and the national debt. Republicans are backtracking. To address the problem of the growing national debt we must address Social Security and Medicare and Republicans have joined Democrats in taking those issues off the table. 

We're rolling downhill like a snowball headed for hell. 

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