By Greg Maresca
July 4, 1776 is arguably the most significant day in American history. Another noteworthy day of Americana arrived on Monday, July 29, 2024, as a footnote, when it is anything but. It was the day our national debt eclipsed $35 trillion.
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Like so many other things, such a sum was simply unimaginable a generation ago. No wonder why no politician regardless of party wants to talk about it, let alone do anything to reduce it.
The same holds true for the third rail of politics—Social Security. The Social Security Administration (SSA) believes half of those who are now 80 will outlive the system’s ability to pay (including Medicare) that will be exhausted by 2036. Every penny SSA has ever collected has been paid out. Social Security was established as a pay-as-we-go, a government Ponzi scheme—nothing but a layered bunch of IOUs and certainly no retirement plan.
To solve the problem, the government will have to either raise FICA taxes by 33% or cut benefits by 25%—or even more over the next decade. Bernie Madoff went to jail for the same type of Ponzi scheme Uncle Sam has done with your FICA taxes. Shouldn’t the government be held to the same standard?
If Social Security is the third rail of politics, the exploding $35 trillion federal debt is the electric chair. Writing out all the zeroes captures the insanity: $35,000,000,000,000. If you placed 35 trillion dollar bills from end to end (just over six inches long) they would nearly reach Pluto. According to website “Just Facts,” as of August 2024, the debt per household is $266,745. Keep in mind, it took more than 230 years for our national debt to reach $17 trillion.
Our debt has boldly gone where no government has gone before, and the culprits are many. High inflation brought on by stimulus spending and a print first ask questions later monetary policy has only increased debt interest payments. Every time a new dollar is created, the value of each existing dollar drops. Yet stocks keep pushing higher.
The total debt of every country is $91 trillion. More than a third of it comes from the United States. The International Monetary Fund (IMF) underscores U.S. debt could destabilize the global economy.
“We’ve hit a turning point,” said Kenneth Rogoff, former chief economist at the IMF, who calls the rising interest on our debt “a huge economic problem and the biggest thing that’s happened in the global economy in the last five or 10 years.”
The interest alone this year is nearly $1 trillion. The nonprofit Committee for a Responsible Federal Budget estimates that all the policies in Kamala Harris’s plan would increase deficits by $1.7 trillion over a decade. Uncle Sam is already running trillion-dollar-plus deficits annually.
Debt-to-gross domestic product (GDP) ratios can be misleading, as they divide the debt by GDP, which is $25.44 trillion meaning the debt is equivalent to 137% of GDP. Using GDP growth as justification for continued federal deficits is a mistake that continues unabated. Congress cannot keep its fiscal house in order spending nearly $12 million per minute. This should be a wakeup call but, instead, the snooze continues.
The feds should spend only what it collects. Such common sense should be law. In 2023, $4.4 trillion was collected, meaning the debt is nearly eight years’ worth of revenues. The numbers are large, but the equation is relatively simple—and so is the solution.
Debt should only be used for that proverbial “rainy day.” Congress has run surpluses in the past (five in 50 years), according to the U.S. Treasury. Surpluses are possible and, since Congress holds the purse strings in order to keep taxes in check, a deep cut in spending is warranted followed by tax cuts once the federal budget is balanced.
When politicians spend recklessly, we all lose. As a nation we are long past time to debate monetary policy by both parties. Rather, this core issue is ignored.
Government doesn’t generate income, it acts as a collection agency, while its investments rarely pay for themselves. In the end when the bill is rendered, and it is coming due—especially Medicare and Social Security—it will be paid by “We the People.” Guaranteed.
Greg Maresca is a New York City native and U.S. Marine Corps veteran who writes for the Sample News Group while residing in the Pennsylvania Coal Region. His work can also be found in the Remnant, a national Catholic publication. In his stickball days, he was a two-sewer bat.
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