The tax cut bill President Trump signed at Christmas gave Americans a reason to celebrate. Last week’s Treasury Department announcement on the deficit was the hangover that followed.
The federal government, according to the Washington Post, is on track to borrow nearly $1 trillion this fiscal year – Trump’s first full year in charge of the budget.
That’s almost double what the government borrowed in fiscal year 2017 and represents the highest level of borrowing in six years.
The Congressional Budget Office attributed the projected hike to lower tax receipts due to the new tax law.
Perhaps more disturbing than the level of borrowing and resultant higher debt, is that fewer of us seem to care.
A recent survey from Pew Research Center asked respondents whether they think various issues and initiatives, including reducing the deficit, should be a priority for the president and Congress this year.
In 2012, under Barack Obama, 72 percent said reducing the deficit should be a top priority; today, the share is down to 48 percent.
We know Congress doesn’t care, it keeps spending. But when the people quit caring and refuse to hold Congress accountable, we are in real trouble.
We are becoming tone-deaf to an issue that poses grave consequences to our economy. It is not a question of “if,” it is a question of “when,” according to economists who say a day of reckoning is inevitable if we continue on this trajectory.
We may already be experiencing those consequences. According to the Post, investors are concerned about all the additional borrowing and the likelihood of higher inflation, which is why the interest rates on U.S. government bonds hit the highest level since 2014. That, in turn, partly drove the worst weekly sell-off in the stock market in two years.
The market correction comes at a time when Congress is contemplating spending even more money on infrastructure, the military, disaster relief and other domestic programs. And don’t forget, Trump wants to build a wall on our southern border that is projected to cost anywhere from $21 billion to upwards of $70 billion and millions more each year to maintain.
Interestingly, Trump didn’t mention the debt or the ongoing budget deficits in his State of the Union address. He did hammer home the point that our economy is roaring.
Maybe that is what has triggered our deficit amnesia. We don’t want to be bothered with dire debt warnings when we are celebrating a strong economy and a resurgent job market. We want to celebrate good times.
We don’t want to think about the hangover that is coming.