According to the Treasury Department’s treasurydirect.gov website, United States taxpayers must chip in to pay $1,256,280,239.21 on interested on our federal debt.
A day. Every day.
Yes, we must pay $1.26 billion a day in interest payments or $458.5 billion a year. We get no government services for that money, no national defense. Just paying interest on what we owe.
This year our federal budget deficit is $666 billion. That’s an increase of $80 billion over last year and is the biggest shortfall since 2013. One of the reasons for the increase, is the cost of our interest payments on debt keep rising.
Our debt now exceeds $20 trillion. Last summer Congressional Budget Office economists said in a report that if nothing changes, the debt held by the public would rise to 91 percent of the economy by 2027.
The tax plan the U.S. Senate passed would add $1.5 trillion to our national debt over 10 years, and that’s on top to the annual increases we are already adding because we don’t have a balanced budget.
The House tax plan would add $1.7 trillion over 10 years.
Leaders in Congress dispute that because they say trickle-down economics will pay for the tax cuts.
Ronald Reagan had to close loopholes to save the economy because he cut taxes too deep. In 1981 he cut taxes and the deficit began to grow, up to $221 billion in 1986. Reagan, being a responsible steward, closed loopholes on taxes in 1986, increasing tax revenue. The deficit began to decline and the economy thrives in the 1990s as a result.
It’s impossible to judge the Bush tax cuts, because the massive increase in military spending skews any fair analysis of that.
In 2014 Kansas lawmakers pushed through massive tax cuts. Revenues shrank, the economy grew at a slower rate than neighboring states that didn’t slash taxes, Kansas’ bond rating fell and the state cut spending on education and infrastructure. In 2016 lawmakers reversed themselves and voted in $1.2 billion in tax hikes, overcoming a veto by the governor.
North Carolina lawmakers cut their taxes to the tune of $3.5 billion this year. Growth is better there than in Kansas, where they remain at about the national average. But all the promises of new investments and jobs has not come true.
“There’s nothing magical that has happened in North Carolina,” John Quinterno, an economic analyst at the Chapel Hill-based research group South by North Strategies, told the Washington Post.
Now lawmakers there are wondering how they will pay for essential services, such as schools.
And then there’s Arizona, where they keep slowly cutting taxes and slashing funding for public education. Our children are paying the price for our tax cuts.
I emailed two organizations that support cutting taxes, Club for Growth and Americans for Tax Reform, and asked them one question: I want to be fair, can you show me a case where cutting taxes actually did lead to an increase in the economy that was at least close to paying for itself?
We don’t yet know what form the final tax cut package Congress will vote on will look like. Chances are, based on the past few months, neither will our representatives in Congress when they vote on it. It is very likely that the tax cuts for the middle class and poor will expire in 10 years.
Leaders in Congress say don’t worry, they will be extended, this is just a gimmick they need to pass it now.
Except, in 10 years the debt will be even larger as will the amount we’re paying in interest. The pressure to finally get serious about the debt will be intense.
Our economy is growing, slowly, yes, but growing. It has been for nearly a decade. There is plenty of need to simplify the tax code, remove some loopholes, give some relief to those most likely to spend it. There is no need to give a tax cut to people who already have a lot of money that they aren’t investing, or spending, now.
Any member of Congress who votes for this final bill, if it continues in the direction it appears to be going, should never call themselves a deficit hawk.
That said, let’s pass around the hat so we can come up with the $1.26 billion we need for today’s interest payment and then go apologize to our grandchildren for what we are doing to their future.
Email Ken Sain at email@example.com.