Comfortably numb

Hello? Is there anybody in there?

Abody can only imagine what Harry S. Truman would say about this. He once demanded advice from a one-armed economist, after hearing—for the upteenth time— somebody in the Dismal Science give him the old “on the one hand this, on the other hand that” advice/prediction about the economy.

The Dismal Science? Certainly. Which may be why Bloomberg’s people tried to make it more interesting the other day. According to the outfit’s wire report, Bloomberg Economics “has run a million simulations to assess the fragility of the debt outlook.”

Whoot! Whoot! Party time at Bloomberg! Those boys know how to get down.

We can only imagine—for a few seconds, tops—how many variables have to go into the computer to get a million simulations on how the economy will manage. War or no war. Bank run in Austria or no bank run in Austria. Tax increases in France or no tax increases in France. Recession in Japan, or no, wage depression in Europe, or no, trade war in Asia, or no.

After running the numbers—a million of them—Bloomberg’s people say in 88 percent of the simulations, the United States’ debt-to-GDP ratio “is on an unsustainable path.” For the nonpartisan part of the government, the Congressional Budget Office warns that government debt is on the way to 116 percent of GDP in 10 years, which is higher than the debt the country took on during World War II.

As for the partisan part of government—the Biden administration’s finance people—they say everything is hunky-dory.

A few weeks ago, Treasury Secretary Janet Yellen told lawmakers: “I do believe we need to reduce deficits and to stay on a fiscally sustainable path.” Stay on?

The administration’s plan is to offer “substantial deficit reduction that would continue to hold the level of interest expense at comfortable levels.” Continue at comfortable levels?

In 10 years, the United States—all of us who pay taxes—might be paying many times more for interest on the national debt than we spend on the Defense Department. This is folly. And it’s folly our children and grandchildren may have to fix, with no telling how much pain.

Ahuman has a hard time fathoming a trillion anythings. It’s much too big a number. Somebody once put it this way: If you spent $1 million a day, and had been spending $1 million a day since Jesus was alive, you still wouldn’t have approached $1 trillion by now.

A trillion seconds ago was before mankind began to write down language. We were still drawing pictures on cave walls. Britain was still connected to Europe—by land.

A trillion is a lot.

We remember economists in the 1980s arguing that the national debt wasn’t that important, because the nation would grow past it; the economy would become so large that a piddly $2 trillion or $3 trillion debt would be easily serviceable. And politically viable, given what those trillions would give to Americans.

But nobody—nobody—thought that the debt would rise to $34-plus trillion in our lifetimes.

To use a phrase economists use, this kind of spending is not sustainable. The interest payments alone will eventually push out other government spending. As a wise man once told us, if this kind of government spending doesn’t have consequences, it will mark the first time in human history.

As we hurl ourselves and our children toward ruin, we have to ask: Why not go back to the past? It would be progress.

For example, in the eight years that President Obama was in office, he added $8.6 trillion to the national debt. Think Obamacare, etc. Surely nobody thinks the Obama administration was a bunch of skinflint misers who put grannies in wheelchairs on the streets. So why not go back to the level of spending of, say, 2017?

In Barack Obama’s last year in office—a mere seven years ago—the government spent $3.981 trillion, which was still a deficit because the government took in “only” $3.316 trillion. Let’s round it up and say the American people could get by nicely with spending $4 trillion annually once again.

Last year, in fiscal 2023, the government took in $4.6 trillion. If we could “only” spend $4 trillion, we could begin to pay off the credit cards. Even if you make the argument that there are more people in the United States today than six years ago, then adjust spending upward accordingly. We’d still be on the right path toward solvency.

This year, federal outlays will rise to $6.5 trillion. That’s $2.5 trillion more than this government spent in the last year of the Obama administration. This is crazy spending. And it wouldn’t throw anybody out on the street to go back to the budget that the last Democratic president “got by” with. In fact, the country really could begin to grow out of the problem.

Economists used to argue whether the debt was really A Thing. We don’t hear many of those arguments now that the debt has surpassed $34 trillion and will start approaching $40 trillion quicker than any of us might want to think.

We remember something that the late Herbert Stein, an economist of note, once said. It’s worth repeating today: “If something cannot go on forever, it will stop.”

And when this Thing stops, it might screech to a halt. Throwing all of us out of our seats.