It is true that a government’s
budget can be read as a blueprint of priorities in terms of what is valued, and
what is not so highly valued. The blueprint itself, as a whole, also evinces a
priority in terms of values. As the big-ticket items, such as large spending
categories and massive tax-cuts, get the most attention, whether a budget is in
balance can go by the wayside, and what that says about the electorate (and
thus the state of democracy) can easily be missed. Ultimately, public policy
and even the votes of the elected representatives point back to the popular
sovereign, the People—more specifically, the electorate, and its values. By 2024,
the deficit and accumulated debt of the U.S. Government had reached such
gigantic numbers that something could be said to be amiss concerning those
values. The underlying culprit, which can be said to be an illness that is
human, all too human, had by then infected American democracy beyond the wherewithal
of virtually any elected federal representative to enunciate well enough that
the electorate could look clearly at itself, and thus size itself up beyond the
partial diagnoses that can be found in partisan attacks.
In late June, 2024, the (nonpartisan)
Congressional Budget Office forecasted a $2 trillion deficit for the year, up
from an earlier estimate of $1.6 trillion.[1]
At the time, the federal accumulated debt stood at $34 trillion. Whereas in the
1970s, the debt as a percent of GNP was in the low 30s, the percentage for 2023
stood at just over 120 percent. Clearly, the trajectory of deficits and debt
was disproportionate even on a percentage basis. Furthermore, interest payments
made by the U.S. Government, which the CBO director said were “large by
historical standards,”[2]
were poised to exceed the entire defense budget in 2024; and that recipients of
interest-bearing bonds tend to be on the wealthy side, whereas the poor and
middle-class pay taxes, the ballooning debt could be viewed as an engine of
wealth-transfer from the poor to the rich via the U.S. Government, hence
increasing economic inequality as an indirect effect of fiscal public policy.
In short, something systemic was out of balance, with ethical implications.
Blaming large ticket items (i.e.,
federal spending) provides us with an easy target but only gets at a symptom. Regarding
the 2024 fiscal year, the Congressional Budget Office pointed to the $145
billion cost of the President’s changes to student loans and the $95 billion
foreign aid for Ukraine, Israel, and Taiwan enacted in April as the two largest
factors.[3]
Almost a trillion dollars for three countries. Healthcare costs came in third.
To be sure, the changes in
student-loan policy under President Biden were in large part due to the
spurious vocational claims of for-profit “universities and feckless accrediting
agencies, with unemployed former students as the victims. The foreign-aid spending
was associated with foreign policy objectives—holding back Russia and sending a
message that military aggression (by Russia) is no longer acceptable in the 21st
century being foremost. In short, both deficit-growing factors were oriented to
protecting victims, and thus could be justified ethically. Increased public
health-insurance costs too can be justified ethically, given the value of
health irrespective of income and wealth.
Even lofty goals come with costs,
however, which may not be affordable. A sovereign government with the authority
to “print money” need not be constrained by what it can afford, absent
constitutional language mandating a balanced budget. Of course, spending is
only half of the deficit equation; taxation being the other. That spending had
been outstripping revenue since the Clinton administration can be traced back
to the Reagan tax cuts. Regarding the deficit in 2024, the Trump tax cuts should
also be remembered. Moreover, the refusal of Congresses and presidents to raise
taxes to cover increases in spending when the economy is fine or (especially) good
is also a factor in how the U.S. Government’s debt got to $34 trillion.
Both the proclivity to increase
government spending and the reluctance to increase taxes (or defeat tax-cut
proposals) leads us directly “under the hood” to popular sovereignty:
Government by the People. That is to say, the American electorate is ultimately
to blame for not electing representatives, senators, and presidents who resist
the twin temptations. To be sure, differing political ideologies on the proper
size of government, and, more specifically, the federal government, are also
legitimate in voting decisions.
A believer in a small federal
government, harkening back to Thomas Jefferson, might vote for candidates in
favor of tax cuts in order to “starve” the federal government. But this
strategy ignores the unlimited ability of that government to enact spending
bills. A “small government” ideology should go after spending and taxes with
enough tax revenue over spending in the out years to pay off the accumulated debt.
A believer in a large federal
government (in absolute terms and relative to those of the states) has no problem
resisting tax-cut proposals; it is the notion that a government can or should
grow by increased spending, especially without increased taxation to cover both
the additional spending and to pay off the accumulated debt, that is
problematic.
In the 1980s and early 1990s, the
U.S. deficits (and debt) were significant in political discourse. David
Stockton, President Reagan’s head of the OMB (Office of Management and Budget),
wrote The Triumph of Politics to explain why Reagan failed to bring down
the deficit numbers. The imbalance was in the public’s aversion to cutting
domestic spending, Reagan’s increase in defense spending, and the president’s
tax-cuts. In terms of the American electorate, the desire for immediate consumption,
which includes tax-cuts, combined with the lack of responsibility can be cited
as the ultimate source of the imbalance that may be inherent in democracy
itself.
It is significant that Thomas
Jefferson and John Adams agreed long after they were out of the political arena
that a viable republic requires an educated and virtuous citizenry. Put
another way, self-government requires a sense of responsibility in terms of
fiscal governance. That the debt of the U.S. Government had been allowed to
reach $34 trillion by 2024 can be interpreted as a verdict, or an x-ray, on
just how fit the American electorate had been to govern itself through its
chosen representatives. The real threat to American democracy lies within. The
threat, in fact, by 2024 may have become much more serious than even that of unbalanced
fiscal policy. For the proverbial invisible
“elephant in the room” may no longer have merely been the failure of the
American electorate to exercise its popular sovereignty with fiscal responsibility
on governmental taxation and spending: the rising unexamined question may ironically
have already relegated fiscal responsibility altogether in silently asking
whether $34 trillion ever gets paid off. Like an insect whose legs are still
twitching even though it is already dead, the U.S. Government may have already been
effectively bankrupt without anyone realizing it. If this was already de
facto the case by 2024, then the damning verdict, not seen yet in plain sight,
would be on another level entirely.
2. Ibid.
3. Ibid.
