National Debt

What Was Missing From Trump's State of the Union? America's $1 Trillion Deficit

Or the $22 trillion (and counting) national debt. Or the entitlement programs that will continue adding to them.

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America is running a near-record deficit despite close to a decade of continuous economic growth—and the nation's $22 trillion national debt is on a trajectory that will see it reach 93 percent of the nation's economy by the end of the next decade, higher than it was during World War II (and far beyond that in the decades to come).

That's the kind of problem that you might expect to be part of a serious and significant policy speech like the annual State of the Union address. But there was no mention Tuesday night of the urgent need to bring federal spending in line with tax revenue, and no discussion of how to curb the long-term growth of entitlement programs. About the only mention of spending at all, in fact, was a promise to "outspend" China militarily.

The Congressional Budget Office now says that America won't run a $1 trillion deficit until 2020—after some earlier projections estimated we'd hit that mark in the current fiscal year—but the temporary reprieve means little. While discretionary spending is set to decline by 1.3 percent over the next 10 years, the entitlement programs of Social Security, Medicaid, and Medicare, and the interest on the national debt, will continue to push the deficit higher.

Source: Congressional Budget Office January 2019 Budget and Economic Outlook

The decision to steer clear of the federal budget in Tuesday night's State of the Union address was not a mistake. Asked earlier on Tuesday about whether Trump would discuss the national debt in the speech, Chief of Staff Mick Mulvaney—the same Mick Mulvaney who made his name in Congress as a budget hawk—reportedly told reporters that "no one cares."

The deficit is not a sexy issue and it's not something that's likely to get solved quickly. It doesn't make for a good soundbite. And, of course, talking about something in the State of the Union Address is not the same as actually doing something.

Still, the talking matters. Acknowledging the size of the problem is a first step towards tackling it, and Trump refused to take that step on Tuesday night. It's unlikely Congress will act without considerable prodding—or until the debt becomes too large for the economy to bear, something that might happen by the end of the next decade, when the national debt will near the size of the economy as a whole.

Indeed, if the policies outlined in Trump's State of the Union address were to become reality, it would likely be bad news for the federal budget deficit. He promised to spend more money on the military (including on nuclear weapons), and to build his coveted border wall. Still, to be fair to the president, there have been many, many State of the Union speeches that have promised more spending—and rarely is deficit reduction on the menu. It's also not difficult to imagine a future Democratic president using the State of the Union to call for Medicare for All, which would only compound the entitlement spending that's driving much of the deficit.

Our days of being able to ignore the national debt and the entitlement programs continue to tick away.

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51 responses to “What Was Missing From Trump's State of the Union? America's $1 Trillion Deficit

  1. Here we come, fiscal cliff!

    1. And how much blame will you put on Congress instead of trump? Veto proof spending bills are veto proof after all.

    2. I do love that many of the people who spent years telling us we were headed toward this fiscal cliff, people such as Mick Mulvaney, now just tell us how we are making such good time on the way where.

      And I would be surprised if it takes us until the end of the next decade to get to 93% of GDP. One good recession and will we see the government go to $1.5T-$2T deficits while fighting it. GDP will drop some and we will hit 95% of GDP in the blink of an eye. We are almost 10 years from the end of the last recession, so the next one is likely closer than the previous one. It will be hard to keep the wheels from coming off when it happens.

      But hey, for today we have ‘the hottest economy anywhere in the world”. Until it bursts into flames.

    3. The DEBT is not the DEFICIT. And the DEFICIT is not the DEBT. They are separate problems.

      Government BORROWING drives up the debt, not government SPENDING.

      The solution to our debt problem is simple: STOP ISSUING DEBT-BASED MONEY! Begin issuing pure “unbacked” fiat money to fund the deficit, rather than going further into debt. The inflationary impact of unbacked dollars is no worse than the inflationary impact of the same amount of debt-backed dollars. Issuing unbacked dollars will halt the increase in the national debt and its crushing $430 billion in annual interest. Paying off part of the maturing debt each year and rolling over the rest will eventually bring the national debt (and its taxpayer-financed interest payments) down to zero. See http://www.fixourmoney.com .

  2. Nobody cares lol.

  3. Oh look, it’s Debbie Downer!

  4. Here is where John and lc1789 and the other Trumpistas could show some spine and admit Trump has his faults, or at least one fault.

    Naw, the best they’ll say is either (a) he’s raising revenue through tariffs, or (b) he’s playing 36DD chest.

    1. Poor alphabet troll. He can’t read well enough to see when I mention the things that Trump is doing that I think are wrong.

      They just get so upset when I mention all the things that Trump is doing that are AWESOME.

      It probably why they are so bad at “n”th D Chess.

      1. Poor Nazi troll bitch can’t substantiate one claim he makes.

        When you are laying in bed at night next to your mom do you still fantasize about Trump grabbing your pussy?

        1. Godwins law takes another scalp

    2. Or you could figure out how government works and figure out what a veto proof majority is. Maybe learn what baseline budgeting is and how it assumes a higher spending growth rate than GDP. Realize that entitlement growth programs are growing faster than the economy. If you learned what a Pert equation was and plotted economic growth against spending growth you might start to realize what the problem is

      But naaaaaaah. Pointing at the man who has been in office 2 years and blaming him for everything is easier. Yes, it’s stupid, but boy is it easy.

      Our deficit issues are structural. You idiots cant realize that.

      1. No one is blaming Trump for everything (other than Democrats). But you can’t even admit he is wrong here, in something as obvious and simple as proposing less spending, let alone the courage to veto too much spending.

    3. I’m more of a Ron Paul kinda guy myself… But we got Trump instead. So it is what it is!

      I actually agree with him on several of his non libertarian positions, because pure libertarianism is simply not workable on some fronts in the world as it exists today… But I completely disagree with him on other things.

      I’d LOVE to see a balanced budget. But it just ain’t gonna happen. Even if Trump wanted to, which I think he probably likes the idea in theory, he couldn’t ever get it done. Between the Dems, and all the RINO types, there’s no way he could balance the budget if it was his sole priority. And surely not by reforming entitlements.

      I think Ron Paul (and many others with the same opinion) is correct in his assessment that we will never get the deficit/debt under control until we’re forced to by some major economic calamity or the total collapse of the dollar.

      So this is almost like bitching at Trump for not achieving world peace… Sure, he didn’t… but was anybody ever going to? Not so much.

      1. I love Ron Paul & his son, Rand too, but if either guy got in as prez & tried to do the things they promised, they would be shot dead within 6-12 months after the inauguration!

        1. Yup. They’d JFK their ass ASAP.

      2. I don’t think he likes the idea in theory, much less in practice. He wants to be liked, and the way to do that is continue providing social welfare benefits while cutting taxes. If he cared at all about a balanced budget he wouldn’t be so quick to give farmers welfare.

        1. Well, I think he is definitely into being liked… And he is no purist libertarian, so sees some programs as being okay/useful for achieving ends.

          That said, I have a sneaking position from some of his off hand comments over the years that if he were magically dictator, he would just say “Well, fuck these entire departments. They’re stupid, we don’t need this crap anyway. And all these particular programs in other departments… Let’s just get rid of them!” with a lot of things he DOESN’T like. IMO that would probably be things like certain welfare programs, maybe stuff like the department of education which he may not care about either way, etc.

          It would be out of a personal dislike of some things, and just technocratic not seeing the spending being worth it, not principles… But I think he would radically reform the federal government if he had a blank check. But he doesn’t. So he won’t. Also, one DOES have to worry about getting reelected. But some of his off hand comments about just shit canning huge chunks of departments etc that he has made make me think he WOULD go there if he could.

          He would surely leave other things, like military spending, alone or even increase them.

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  6. Did Obama mention his trillion dollar deficits in the 3 years he ran them? (honestly asking)

    1. They blamed it all on Bush for FY09 even though he refused to sign it. Then Reid used the temporary spending of TARP to increase the baseline budgeting equation and blamed it on Bush as well.

  7. Did Obama mention his trillion dollar deficits in the 3 years he ran them? (honestly asking)

    1. Obama was doing Allah’s work. You can’t put a price on that.

      1. Depends on how much cash you can put on a pallet.

      2. I thought Allah did not like crack-smoking homos?

  8. Number of viewers of the State of the Union addresses from 1993 to 2018 (in millions)
    Feb 5, 2019 had 23 million viewers. In addition, the overall numbers for last night’s broadcast don’t account for cable viewership on channels that were not ABC, NBC, CBS and Fox.

    1. Only 98.2 million Americans watched the Super Bowl this year, which is down to 2009 viewership levels.

  9. In a way it’s true that no one cares about the deficit, but I think that’s because inflation is so tame. The federal government cannot run out of money in our fiat currency system. The risk is harmful inflation.

  10. In a way it’s true that no one cares about the deficit, but I think that’s because inflation is so tame. The federal government cannot run out of money in our fiat currency system. The risk is harmful inflation.

    1. This is technically true. The question is when it all comes down, will it be 1970s style US inflation again… Or Wiemar Germany level inflation.

      1. Perhaps factors other than debt levels will be most important. In the hyperinflations since 1900, there has generally been at least one other severe exogenous event besides high government debt. These tend to be loss of a war, a collapse in production, massive government corruption, regime change, or ceding of monetary sovereignty via a pegged currency or foreign denominated debt. I don’t think the last two are likely, but I have concerns about corruption and regime change.

        1. For sure. Ultimately it is all a matter of CONFIDENCE. If anything happens where people completely lose confidence in the US, we could see a rapid devaluation of the US dollar, would could then lead to the other massive economic problems, which creates a downward spiral. It’ll happen sooner or later, as has happened with every fiat currency ever.

        2. For sure. Ultimately it is all a matter of CONFIDENCE. If anything happens where people completely lose confidence in the US, we could see a rapid devaluation of the US dollar, would could then lead to the other massive economic problems, which creates a downward spiral. It’ll happen sooner or later, as has happened with every fiat currency ever.

        3. For sure. Ultimately it is all a matter of CONFIDENCE. If anything happens where people completely lose confidence in the US, we could see a rapid devaluation of the US dollar, would could then lead to the other massive economic problems, which creates a downward spiral. It’ll happen sooner or later, as has happened with every fiat currency ever.

  11. So now that the dems control the house are we going to see smaller deficits?

  12. A small savings can be realized by drawing down military forces in Syria and Afghanistan. Conventional conflicts are very troop-intensive which means that the costs incurred will be very long term.

    The military-industrial complex needs some spending because the Russians and the Chinese are cooking up some remarkable new weapons technologies. Even if never used, such terror weapons have a certain psychological weight.

    Savings are being realized by rolling back regulations on what businesses can do and citizens can do. These are indirect savings and hard to measure. However, sometimes what we can’t assess is the most important of all.

  13. This article shows perfectly that the OP does not understand monetary theory at any level. The united states could double or triple the deficit and it will have no effect in the following decade. The USD is a fiat currency controlled by Congress. Should congress pass a law, the entire debt could be repaid tomorrow. What matters is inflation. The level of debt (so long as it is entirely based on a fiat currency controlled by the US Government) is essentially meaningless.

    If the level of debt of a fiat currency is so important and hitting 100% of GDP will certainly lead to collapse, please explain Japan.

    I am waiting……

    1. Jeffrey, the reason the US and Japan can get away with printing money is because they are important world currencies and because they have large, affluent domestic markets. The US is THE world currency and Japan’s Yen is a big player as well. They get to export their inflation. What would happen if the Yen and the Dollar had the same demand as, oh, the Venezuelan bolivar?

      There are plenty of well-respected and long-stable currencies around the world, the Australian and New Zealand dollars for instance, but if either of those two economies eased the way the US government does, their value would plummet, exports would cost more and inflation would rip the guts out of their economies.

    2. this is true, until an inflection point is hit. probably a loss of confidence. at which point everything will blow up like a ponzi scheme. and it’ll happen quickly. ponzi schemes don’t unwind in an orderly, drawn out manner.

      you saw a teaser of things to come with the bitcoin frenzy.

    3. Deficits don’t matter? That’s loony Left nonsense.

  14. Or the missing Pentagon 21 trillion dollars, being scarcely reported so far. I have seen it in a few places; not enough. As they say, a trillion here, a trillion there, pretty soon…

    1. there is not 21 trillion missing, which is more than the entire defense budgets for the last 200 years combined.

      1. That depends on whether or not you’re using inflation-adjusted dollars. If you think ignoring the time-value of money is a good idea, then you’re going to have a difficult retirement.

  15. All I heard last night was blah blah yada. I did however notice that The Donald had obviously practiced his Il Duce pose.

    1. Yeah, he totally jacked some of Mussolini’s moves! He does them fairly frequently. They’re good ones though, and it’s not like Mussolini invented them or anything! Half of modern politics comes out of stuff pioneered by Mussolini and Hitler, as that was the dawn of the modern mass media age. To expect a politician to run a campaign with out borrowing from the Goebbels play book would be insane.

  16. Yeah, but it’s a dry debt.

  17. There is a bigger problem that nobody is talking about. I don’t have the space here to make the whole case for it. You can see the articles on my blog poligion1.blogspot.com.
    But very simply and briefly:
    Our country at its most basic was founded on the belief that God gave unalienable rights to human beings. But what God and how did the Founders know this? From the Bible and Christianity. Without Christianity, you don’t have unalienable rights, and without unalienable rights you don’t have the United States of America.
    The court called supreme essentially removed Christianity and God from public life, public policy, public schools, and the public consciousness.
    Unalienable rights are things you can do without the government’s permission, regulation, or restrictions. But to talk about that means to talk about God
    So now rights are things that the government does for people, things that people are entitled to. Since the government has changed its understanding of human rights, government spending has exploded and can’t keep up with revenues. It keeps looking for more things to which people have a right to: health insurance, a job, an income, college,
    We didn’t have a problem with government spending until the court removed God from public life. Now government is looked up to to fill that void. People need the security that God used to provide. Now government must take care of people.

    1. This is absurd. The Bible has nothing to do with the Constitution, aside from the establishment clause in the 1st amendment “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof”. That’s it.

      The idea behind the 5th amendment, for example, did not come from the Bible. There is absolutely nothing in the Bible that even comes to relating to the 5th amendment. If it didn’t come from the Bible, then where did it come from? Thousands of years of legal trial and error. We (humans) invented the concept and it seemed to work pretty well, so it stuck around. There are other concepts that haven’t worked so well, so we got rid of them. There are other concepts that aren’t working well, currently, that we haven’t gotten rid of, yet, but we eventually will (one way or another). None of this has anything to do with the Bible, Christianity, or Yahweh, whatsoever. It’s just the mess of humans trying to figure out the best way to run their societies on the fly. It’s evolution.

      1. Well said.

        This whole Judaeo-Christian foundation of society bullshit has got to be challenged. Yes, the dominant religion in many of our societies is Christian, but that’s not the same as saying Christian philosophy is responsible for their success.

        But they keep trotting it out like it’s a given, never once considering the debt to Greece and Rome (and elsewhere), believing that all of springs from a single font in the first century.

      2. “There are other concepts that aren’t working well, currently, that we haven’t gotten rid of, yet, but we eventually will (one way or another)” You mean like democrats?? great idea. I’m in favor.

  18. The SOTU speech, no matter who is giving it, is total whitewash, political and self-serving. It is totally meaningless to the future of our country. The powers that be, the people who are entrusted with the future of this country, are some of the dumbest people on the planet. They will never tell us the truth because in fact, they know not what is true themselves. They are faking it and stumbling along as good as any Hollywood actor.

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