Think of monetary debt as a bomb, and when it goes off it takes just about everything with it.
That may sound like hyperbole, but it’s not. For example, while local governments seem to be on fairly solid fiscal ground, with an exception or two, there is big-time debt lingering in the background, like really bad elevator music.
That is especially true for Santa Barbara County, which balances its budget year after non-recession year without little thought about retiree benefit obligations. There also is the county’s nagging deferred-maintenance problem. Taken together, those two forms of debt soar above $1 billion — money the county does not have.
Brought down to a personal level, most of us carry some financial debt. Credit cards, mortgages, car loans, etc. The numbers slowly add up until the bomb goes off, and you either pay what you owe, default or go through the pain and embarrassment of personal bankruptcy.
But the mother of all debt is owed by our federal government. We broke it down in an editorial a few days ago, but without being overly repetitive, just know the debt is super-sized, and it’s getting bigger.
All of which contradicts campaign promises made by President Trump three years ago. The centerpiece of his campaign-trail fiscal pledge was to wipe out the national debt within eight years.
However, Trump is about two-thirds of the way through his first four-year term as president, and the national debt is soaring.
The current federal government pool of red ink is $22 trillion deep, and last Friday the president added to that debt by approving a bipartisan-crafted budget that will add an estimated $1.7 trillion to the national debt load.
A budget watchdog organization said that, when lumped in with other spending bills Trump has signed, the true addition to the debt will be about $4.1 trillion. A spokesman for the watchdog group said this: “Our national debt is a self-inflicted wound. It will take the kind of leadership that currently doesn’t exist in Washington to fix.”
She is correct about that. Americans have come to expect debt-laden budgets from Democrats, but perhaps not Republicans, leaving little doubt that Donald Trump is not your normal politician. Maybe this president thinks gutting federal agencies, sending federal employees to unemployment lines, will solve the debt crisis. It won’t.
One problem is that so many Americans face personal debt crises, the nation’s problem is off their radar. That won’t be true for long. As the national debt increases, eventually consumers will pay higher interest rates on borrowing on everything from car loans to mortgages. The ripples from the national debt could soon become a financial tsunami.
The budget approved by Congress and signed by the president also increases the debt ceiling, which means the government can borrow even more money, adding hundreds of billions a year in interest payments.
Our elected leaders apparently are comfortable with escalating debt and the burdensome interest payments, perhaps relying on a strategy of leaving the mountain of debt to future generations of politicians, who likely will have about the same degree of courage about dealing with debt, foisting it off on their children, grandchildren and beyond.
What this tells us that neither spend-happy Democrats nor fiscal-tightwad Republicans actually care what happens to future Americans. It’s as though they’ve given up on common sense and fiscal sanity, instead forging ahead blindly with partisan agendas.
There are only two ways to erase debt, and it hurts — reduce spending and/or raise taxes.