National Debt: Politicians Spending Addiction

Yawn.  That's the reaction of most Americans when anyone raises the issue of the country's rotund national debt.  The size of the debt--$23.1 trillion--should concern every American.  Instead people figure it's the federal government's problem.  Not their worry.  They are sadly mistaken or misled.

Quantifying the national debt can be reduced to a few key numbers.  America's debt equals $179,695 for every household in the country.  The federal government carries 46% more debt than the combined debt of every household in America.  The debt is 107% of the U.S. economy.

Even those sobering figures fall short of calibrating the size of the debt.  Consider that in the last 19 years the government has racked up more debt than than in the previous 100 years.  Since 2000, the U.S. has amassed $17.5 trillion in new debt as a result of spending more than its revenues.

The federal government's record spending binge threatens the financial health of the country, which ultimately impacts businesses, jobs and wages.  The budget for fiscal year 2020 is $4.7 trillion, a colossal 164% increase in spending since 2000. Politicians of both parties are complicit.

Federal government revenues are rising too, but at a slower pace.  The federal government estimates it will receive $3.64 trillion in revenue, the lion's share to be paid by individual taxpayers like you.  In 2000, $2.03 trillion flowed into the U.S. Treasury.  America doesn't have a revenue problem.

In 2020, the deficit or revenue shortfall will climb to $1.01 trillion by the time the government fiscal year ends September 30.  Since the end of the Clinton Administration, each Congress and president has overspent.  This trend is unsustainable without major changes in expenditures

It helps to understand what is driving government spending.  In the current budget, six out of every 10 dollars goes to mandatory spending, which includes programs such as Medicare, Medicaid, Social Security, food stamps, federal pensions, Obamacare and veterans programs.

Mandatory spending has automatic increases built in as more people are added to the rolls. Increases in benefits are baked into the budget too.  To put this in perspective, in 1968, three years after Medicare and Medicaid were created, mandatory spending represented just 27% of the budget.

For fiscal 2020, here is a breakdown of the budget for the top three mandatory spending programs: Social Security, $1.1 trillion; Medicare, $679 billion; and Medicaid, $418 billion.  Total mandatory expenditures are budgeted at $2.841 trillion.

This spending category is called mandatory because these programs have been mandated by law to be funded.  This rigid requirement leaves little room for so-called discretionary spending, which amounts to 13.3% of the current budget.  The national defense consumes 12.4% of spending.

The remaining 11.7% of the budget is devoted to paying interest on the debt.  Nearly $480 billion is included in the 2020 budget to service the interest.  There is no room in the budget to actually pay down the debt or principle.  Each year the interest gobbles up a greater percentage of the budget.

Congress has no incentive to reign in spending.  Representatives and senators use the budget as personal piggy banks to fund pet projects in their districts.  That doesn't mean the expenditures are all wasteful, but lawmakers view the projects as little more than a downpayment on their reelection. 

If Congress actually followed its own rules of producing a national budget, there would be more scrutiny of these expenditures.  But lawmakers have failed to pass an annual budget in seven of the last 15 fiscal years, instead using what's known as continuing resolutions to fund the government.

These temporary funding resolutions usually cover six months or less leaving little incentive for  a substantial spending debate.  These resolutions are the product of eleventh hour, horse-trading sessions designed to win both parties' votes and avoid political blame for a government shutdown.

Most senators and representatives, if they are honest, will admit there is too little time for members to even read what is included in the spending resolution.  They are essentially blindly rubber stamping a budget that has been engineered by a handful of members behind closed doors.

This cannot continue if Americans want accountability from their government.  Congress needs to return to the budget process where spending, the debt and specific programs are reviewed, debated, prioritized and voted on.  Congress has no greater duty than to establish the federal budget.

Unfortunately, there is only the dimmest hope this will ever happen.  A divided government, partisan bickering and voter apathy have all contributed to today's sausage making process that serves the interests of senators and representatives but lacks transparency for the American people.

Americans must demand change by contacting their elected representatives and senators.  Otherwise, Congressional members will continue on a track that surely will one day bankrupt the country and force extreme measures, including crippling taxes and Draconian budget cuts.

That day draws nearer each year that Congress refuses to tackle spending and the ballooning debt.