Victor Davis Hanson // Fox News
The current U.S. budget deficit could soon exceed a record $4 trillion. The massive borrowing is being driven both by prior budget profligacy and a hurried effort by the Donald Trump administration to pump liquidity into a quarantined America.
The shutdown has left the country on the cusp of a self-inflicted economic collapse not seen since the Great Depression.
Americans may soon have to service a staggering national debt of about $30 trillion — nearly $100,000 of debt for every American.
Democrats and Republicans can blame each other, either for spending too much or for too little taxation, or both. But both sides will agree that managing such an astronomical debt requires several frightening choices.
One, Americans would be forced to live with permanent near-zero interest rates, or perhaps even negative interest rates.
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Yikes!
Read your article “America facing spread of the $30 trillion debt virus.” One other contributor, which you didn’t mention and which is rarely heard in daily news, is the smoke-and-mirrors concept of supply-side economics. This has come to us with 3 main examples: Reganomics, former Governor Brownback’s Kansas experiment and the Tax Cuts and Jobs Act of 2017. We are now bankrupting our government at a significantly increased rate…The expanded economy has never made up for the lack of tax receipts.
Hello, I am not an angry reader, but rather a fan. And I share your concerns regarding the federal government's finances. However, I wanted to say that we are still a very long way from the $30 trillion figure you reference. Fiscal 2019 ended with debt owed to the public at a little more than $16 trillion. Yes, that's pretty bad. But the claims that federal debt is pushing $24 trillion (or thereabouts) include the balances in the Social Security and Medicare "trust funds" as debt -- perhaps correct statutorily, but a disservice and an obfuscation nonetheless. Of course, you know your Orwell, so you understand that those "trust funds" are simply shining examples of Newspeak and nothing more than exercises in historical tracking. Not that they're meaningless. That historical tracking provides the legal basis for paying benefits when the dedicated tax revenues fall short of those specific outlays on a current basis. But that Congress could change that. Here's the key question: If Congress suddenly decided to eliminate that statutory link and simply retired all those special Treasury bonds in the trust funds, would that, in itself, change anything about our debt owed to the public, our borrowing needs, or the payment of benefits, now or in the future? It would not. In any event, thanks for everything you write. MH
China and Japan and maybe South Korea to a lesser extent are not looking for a safe way to store their money. They force companies to sell their dollars and buy Yuan or Yen, then the governments buy US treasuries. This assures that we have money to buy their products. Switzerland had this problem and regulated foreign countries from buying Swiss bonds. This protected their currency from overvaluing. Ian Fletcher has a good book on this. He is a PhD economist despised by main stream economists. We have three options, produce goods today, sell off assets that we produced yesterday or go into further debt. All the dollars around the world have to be spent in the US eventually. It’s a game of hot potato. They could and are also buying our countries companies. It’s best if we produce things and own the companies.