Opinion, Siskiyou

U.S. Deficit: Why so high and where do we go from here?

by J. Perdue Views: 99

I recently read an article that referenced a Jeff Sachs’ article about our federal debt. According to Sachs, in 2000, the US Federal debt was $3.5 trillion, roughly 35% of GDP, Gross Domestic Product. For those not familiar with economics (me), GDP is the monetary value of services and goods. He says that if the debt would have remained at 35% of GDP, our deficit today would be $9 trillion. But it’s not. As of 2022, the US Federal debt is $24 trillion, or 95% of GDP. Where did the additional $15 trillion come from? Sachs references two reports from the Watson Institute, International & Public Affairs, Brown University. The following is a quote from one of the Watson reports; “Through Fiscal Year 2022, the United States federal government has spent and obligated $8 trillion dollars on the post-9/11 wars in Afghanistan, Pakistan, Iraq and elsewhere. This figure includes: direct Congressional war appropriations; war-related increases to the Pentagon base budget; veterans care and disability; increases in the homeland security budget; interest payments on direct war borrowing; foreign assistance spending; and estimated future obligations for veterans’ care.”

Take a moment and think about how much is $1 trillion. When the Powerball lottery got to $1 billion, it’s hard not to think about, what would it be like to win $1 billion? That is $1,000 million. A million dollars times 1,000. Even if you took the one-time cash payout, it would be a little over $500 million. How much is $1 trillion? It is 1,000 billion dollars. That is 1,000 piles of one billion dollars in each pile. It’s easy to lose track of how much money we’re talking about when we start discussing federal debt. Anything over $100,000 sounds like a lot to me. It’s hard for me to think in terms of millions of dollars, or billions of dollars. But trillions? That’s a lot of cash. 

So, $8 trillion of the additional $15 trillion is attributed to the costs of war and its’ associated costs. That’s a little over 50% of the increased debt. The rest is attributed to the financial crisis (housing crisis) of 2008 and the government bailout of the Wall St. companies, and the pandemic. We saw a complete lockdown for 45 days, including the airlines and cruise industry. How many $millions went to just those two industries? There were three stimulus bills, two under Trump and one under Biden. The reason I bring this up is, according to Glen Greenwald, the journalist whose article I referred to at the beginning of this piece, according to Greenwald, the New York Times published an article, where I’m quoting here; ”Both parties will have to compromise: Republicans must accept the necessity of collecting what the government is owed and of imposing taxes on the wealthy. Democrats must recognize that changes to Social Security and Medicare, the major drivers of expected federal spending growth, should be on the table. Anything less will prove fiscally unsustainable. (NYT, Editorial Board. July 5, 2023).” Here’s a quote from Greenwald; “The one question not mentioned in the editorial: whether the U.S. Government might want to consider taking a break from endless warfare and spending more than the next 14 countries combined on weapons acquisition.” 

In simple terms, the editors at the New York Times are telling the American public that even though they, the American people, are not the ones who made the decision to invade Iraq, and they didn’t make the decision to fight the Taliban in Afghanistan for 20 years, they are the ones who will have to sacrifice in order to make a dent in the federal budget. Did the Times suggest that politicians take a pay cut? What about the people who made the decisions to go to war in Iraq and Afghanistan? Are they being asked to take a pay cut? Did the Times’ article suggest we try harder not to get into wars? No. WMD’s, Weapons of Mass Destruction, were never found in Iraq. Wasn’t that the reason to invade?  How did we benefit from invading Iraq? How long did it take for the Taliban to take control of Afghanistan after we pulled out? Not long. What did we gain? It would not be a stretch to say our tax dollars were mismanaged. Not to mention the death, destruction, and trauma of war.

Now, less than a year after pulling out of Afghanistan, we find ourselves financing a war in Ukraine. A war that many people believe could have been avoided if the US and NATO would have made the effort to keep Ukraine neutral, meaning, that Ukraine doesn’t join NATO, at least, not anytime soon. Biden was asked last year by a reporter, what is his goal in Ukraine? President Biden turned toward the reporter and said,” to weaken Putin.” I take that to mean the Biden administration is hoping for a regime change in Moscow, and that he will support Ukraine in their war effort for, “ as long as it takes.” How long will it take for a regime change in Russia? To get rid of Putin? Who knows.

If you look at the foreign policy of the US government, going back to the late 90’s, some of those involved worked in the Clinton administration, some in the Bush and Obama administrations, and now the Biden administration. The Trump administration was the exception. In the early 90’s the US State Dept. told the Russian president, that NATO would not move one inch further east. That changed under Clinton’s State Dept. and the expansion of NATO began, even though Russia protested, especially when Putin took over in 2000. Our foreign policy has been to ignore Russia’s concerns. My point is, the people who were involved in deciding to invade Iraq, and go to war in Afghanistan, some of these people are still influencing our foreign policy today. Looking at their track record, it is easy to believe we are in for a long, protracted war in Ukraine. Peace doesn’t seem to be at the top of their priorities. This fits the pattern that has been going on for a little over two decades. War. 

The Greenwald and Sachs articles are both saying the government needs to take a hard look at the policy of war, and the costs, and how this impacts the deficit. 

Just recently the governments’ credit rating was reduced because of the deficit and the perception that politicians in D.C will not be able to get a handle on the debt anytime soon. I think that means our debt payments will go up, because of the change in the credit rating, and, along with interest rates already being at their highest levels in years, the debt payments will be even higher. A double whammy. 

Maybe it’s time for those in D.C. to realize the real costs of constant war. Death and destruction are horrible for those who experience war firsthand. Our policies in the middle east, my opinion, gave rise to al Qaeda and Isis. And now the dollar cost of “forever wars” is coming home to roost. Raising taxes on the wealthy and reducing Social Security and Medicare benefits is probably not the answer. Raising taxes on the rich probably will not change their lifestyle, but for those who rely on Social Security, lowering benefits could be devastating. I believe we need a wholesale foreign policy change. 

To summarize, if our debt had remained at 35% of GDP, our current debt would be $9 trillion, not the $24 trillion it is today. The additional $15 trillion is due to war, $8 trillion, and the remaining debt, $7 trillion, is attributable to the financial-housing crisis of 2008, and the debt caused by the pandemic, according to the Watson Institute, Brown University. Going forward, hopefully it will be a long time before another pandemic shows up. Anything like the financial crisis of 2008 is hard to predict. Maybe we will be lucky. One cause of increased debt that our government has direct control over, is going to war. Yes, if we are directly attacked, there is little choice but to protect our country. Has that ever happened since Pearl Harbor? Thankfully. No. 

I wrote this piece to show how war and constant conflict impacts our federal debt, in a negative way. Anyone who has experienced war firsthand, or those who have family members who have experienced war, will know how just how devastating war can be. I hope I haven’t offended anyone by focusing on the dollar costs, because human life is priceless. I hope those making foreign policy decisions will stop and think about this, before diving into the next conflict. Think about the dollar costs, and more importantly, the costs in human lives. 

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