Campaign drama distracting from discussing critical issues

We’re now well into our second week of post-presidential debate aftermath, without any clear change to the status quo in sight.  At least as of this writing, Joe Biden is still the presumptive nominee for the Democratic Party along with Vice President Kamala Harris, while Donald Trump should be announcing his running mate over the next week as Republicans prepare to nominate him again at their convention in Milwaukee.

President Biden’s fitness for office has consumed all of the oxygen of the chattering class and of news organizations for the past couple of weeks.  What everyone should notice in times such as these is that what gets crowded out are the details the respective campaigns are ostensibly running on to execute for the American people.

What should be up front and foremost among our concerns – and thus the candidates’ plans to address – is the current budget deficit and our country’s fiscal state.  We’re running near historic deficits while the economy is at peak employment.  That’s not just a measure of the deficit in real terms, but also as a percentage of GDP.  

Why does this matter? It matters for quite a few reasons, as it affects almost every other issue our current and would-be future leaders say they want to solve.

Let’s start with inflation.  Despite supposed gridlock with a divided Congress, the federal government continues to spend money – and thus borrows more money – outside the Congressional appropriations process.  Much of this borrowing is from legislation already passed.  Some is from the executive branch using or exceeding its congressional authority to reinterpret rules that cost the government, and thus taxpayers, more money.

Some examples?  The Biden Administration re-interpreted rules of the Inflation Reduction Act to allow for significantly more cars to qualify for the $7,500 tax credit than the plain language of the text allows.  Senator Joe Manchin – the architect of the compromise that allowed the bill to pass – strongly objected to the change, but his vote was no longer needed once the bill became law.

The Congressional Budget Office that had originally scored the IRA as cutting the deficit has already increased the burden of the IRA and energy related provisions to taxpayers by another $428 billion.  That’s almost another half trillion added to the national debt over the next decade.

Even the left-of-center Center for American Progress admits the IRA won’t start reducing the deficit until 2028.  They don’t advertise that for this alleged savings to occur, programs like the expanded child tax credit will have to be allowed to sunset.  In short, the IRA uses Washington math to pretend to save taxpayers money, while continuing to add to the debt and deficit.

How about national security?  We continue to fund aid to Ukraine and Israel in supplemental spending outside of the declared budget process.  This, again, is while the U.S. is technically at peace, yet we’re committing hundreds of billions of extra dollars to counter foreign adversaries.  With these two open conflicts threatening to spill over into more direct U.S. involvement, and with China making direct threats to Taiwan and more indirect threats throughout Southeast Asia, the U.S. must have the financial resources to defend itself and its allies.

And back here at home?  We’re not funding border security at a level where we have any hope of curtailing our less-than-legal immigration problems.  The longer we avoid doing this, the more our domestic spending for social programs will increase.  

Infrastructure?  Despite passing a bill with that name in its title, little actual infrastructure can be shown for the hundreds of billions of dollars committed on behalf of that intention.  Roads, bridges, water systems, nuclear power, broadband… the list of needs that could use federal help are near endless.

And yet, here we are, with the economy performing at near peak levels for most of the last decade, save for the temporary shut down for Covid.  We’re riding a sugar high of federal spending, getting less and less for it, and still have people in Washington proposing new spending that will also only be paid for with more borrowed money.

Some deride our current situation as Keynesian economics.  John Maynard Keynes wouldn’t put his name anywhere near this childish attempt to run an economy.

People remember the part where Keynes suggested that the government could prime the pump with deficit spending during a recession with some deficit spending.  No one ever seems to remember that the required corollary to this was to run surpluses during times of economic expansion.

In this regard, Keynesian economics is a lot like socialism.  It’s more than just the belief that the government can solve every problem by just spending more money.  It’s that the problem with Keynesian economics is that it’s never been tried by the right people.  

2025 is coming, and none of those people who would rein in our deficits are among the choices we have for the White House.  We’re arguing over personalities while the fires of inflation and crippling debt still burn.