When historians speak glowingly about the grandeur of the Greeks and of a desire to emulate them, it is more than likely they are talking about Ancient Greece. However, a quick look at the U.S. government’s current leadership, and it would seem they are trying to emulate the Greeks of the last decade, who faced a sovereign debt crisis that crippled their economy. They are heavily resistant to any spending reductions and are running up massive deficits that will eventually circle around to hurt us in the future.
That may come sooner than we think. According to the latest numbers from the U.S. Treasury Department, the U.S. ran a cool $779 billion deficit this past fiscal year, up 17 percent from the year before, and with no sign of slowing down. Keep in mind, this is all happening under the command of a Republican House of Representatives, a Republican Senate, and a Republican President.
Perhaps the only bit of good news from this report is that total government receipts actually rose slightly from fiscal year 2017. While this is usually a good sign for deficit reduction, as is the projected increase in economic output, any increase here cannot possibly catch up to the rapid spending increases promulgated by spending-addicted members of Congress. The true problem is that those in the so-called “party of fiscal responsibility” cannot stop spending.
President Trump declared that he would no longer sign massive spending bills put on his desk, like the one for last year. However, prior to signing the massive omnibus spending bill in March, he had already signed a budget that busted the spending caps to authorize spending at those levels, and since has signed and three minibus appropriations bills that appropriate spending at those levels. There is no sign of slowing down anytime soon. This is the largest deficit in six years, and the fifth largest in modern American history. It is also worth roughly 4 percent of our gross domestic product, which is well above historical deficit-to-GDP ratios.
The administration’s budget requests seem fiscally responsible and cut spending at the behest of the director of the Office of Management and Budget (OMB), Mick Mulvaney. Unfortunately, these proposals have not been adhered to in Congress, or backed up with a swift veto pen. While Cabinet officials like Mulvaney and Treasury Secretary Steve Mnuchin urge caution and spending restraint, as long as President Trump happily cheers on Congress and signs these spending bills with a smile on his face, nothing will change.
Conservatives rightly derided President Barack Obama for his out of control spending, and trillion dollar deficits. Unfortunately, we are on the same path, and could reach deficits of over a trillion dollars as soon as next year. This is because, despite our economic growth and increasing revenue, spending is rising at a much quicker pace.
Although budget deficits can mostly be attributed to mandatory spending, which include programs like Medicare, Medicaid, and Social Security, recent increases in discretionary spending have further increased our budget deficits. Also driving spending is interest that the United States has to pay annually on the national debt that is ever-rising due to these programs. Yet, whenever Republicans have a chance reform mandatory programs or limit discretionary spending, they cave in order to bust the budget on their pet projects in the military, and to curry votes with irresponsible spending packages. Again, rhetoric does not align with reality.
Before long, our spending habits will come around to meet us and we will pay dearly. Unless members of Congress step up and actually try and balance our budget, we will go the way of the Greeks sooner rather than later. There are a number of reasonable proposals in Congress to do so. They should be considered and debated, and our leaders should make the tough decisions they were sent to Washington to make, instead of foisting more debt on future generations.