During tonight’s State of the Union address, President Trump will reportedly talk about immigration, border security, trade, prescription drug prices, infrastructure, foreign policy and trade. The glaring 14-digit item missing from that list? The national debt.
President Trump often boasts about the successes of his first two years in office – or what he refers to as the greatest first two years of any president ever.. Economic growth is up. Unemployment is down. The stock market is performing well. And wages are higher following the largest tax bill in 30 years. On these metrics, the President can rightly say the State of the Union in 2019 is strong.
A train barreling towards a cliff can have some beautiful views along the way. But they won’t be remembered fondly from the bottom of the canyon. All of our petty fights (even over the date of tonight’s address) and twitter wars are luxuries of a strong, sustainable economy. But our economy cannot be sustained if our nation’s finances are not sustainable. And on that front, we have big league problems.
The unsustainability of our budget outlook is not a Republican talking point or a scare tactic used by conservatives to limit the size of government. It is an established fact that is laid out in no-uncertain terms by the non-partisan Government Accountability Office, Congressional Budget Office, and every other independent, objective budget analysis.
Just last week, the Congressional Budget Office reported that our annual deficits are SIX TIMES the size as the average deficit under the current favorable employment conditions. We are soon to reach a $1 trillion annual deficit and that is the lowest level for the foreseeable future. Interest payments on the $21 trillion debt ($920 billion) is the fastest growing budget item and will soon exceed defense spending ($769 billion), Medicaid ($655 billion), and all non-defense discretionary programs combined ($839 billion).
Overall, the gap between what the federal government has promised in spending and the amount of taxes that are expected to be collected is a jaw-dropping $121 trillion. That is a million dollars per taxpayer, or $33,333 per year for the next 30 years. Each!
This path will be especially difficult for younger Americans to navigate. In 10 years, 50 percent of all non-interest federal spending will go to the 20 percent of Americans above the age of 65. What does that mean for the rest of us? The Steuerle-Roeper Index of Fiscal Democracy measures the amount of tax dollars remaining after payments on mandatory programs (i.e. programs that Congress does not appropriate for each year) and interest payments on the debt. In 1967, 60 percent of federal receipts remained after mandatory and interest spending. Today, only 20 percent remain. In a decade, that number will approach zero. Eugene Steuerle’s index shows that “future generations will have no additional revenues to finance their own new priorities, and they will actually have to raise new revenues or cut other spending just to finance the expected growth in existing programs.”
In other words, today’s leaders are locking in future budget decisions and locking out choices and opportunities for younger Americans’ futures.
When our nation is mired in the debt problems that have been accumulating over the last two decades, the Americans who will inherit these debilitating choices will not be recounting the memories of that time in 2019 when the unemployment rate hit a record low. They’ll be angrily questioning how President Trump and so many successive administrations and congresses so severely missed the mark.
The State of the Union is arguably strong. But the Future of the Union is in poor shape.
President Trump campaigned on MAGA. It’s time that he starts working to Keep America Great.