Government Watch / Politics

A Road Map to Address the National Debt Crisis

AMAC Exclusive

debt

The United States will soon pass a foreboding milestone: $29 trillion in national debt. In 2021, the federal debt alone is projected to be 102% of the country’s GDP. Even more concerningly, that figure does not include the $1.9 trillion “American Rescue Plan” that President Biden signed into law earlier this year, nor the $1.2 trillion so-called “bipartisan infrastructure bill” or the $3.5 trillion reconciliation package currently being debated in Congress. The disastrous economic consequences of such runaway spending are clear, and Americans are already starting to feel the pain with runaway inflation and worker shortages. But despite how bleak the situation may currently seem, history suggests that there is a path forward that can lead the country out of this crisis.

The scope of the country’s current debt problem is truly historic. The only two times the debt-to-GDP ratio has exceeded its current level were in 1945 and 1946 (103.9% and 106.1% respectively) at the height of government spending as a result of World War II. Typically, a country incurs a large amount of debt during war time and works to pay it off during peace time.

But now we find ourselves facing historic debt without being involved in any major wars. Moreover, far from a tool to ensure our national security, the debt itself has become a major liability for our national security. As the amount of debt increases, so too does the percentage of the budget required to pay down the interest on that debt.

For example, every dollar spent on interest is one dollar not spent on military readiness. During the recent crisis over raising the debt ceiling, multiple former Secretaries of Defense signed a letter warning Congress that unless the ceiling was raised, there would be “catastrophic consequences for the Defense Department…and our position of leadership in the world.” What’s more, our chief adversary, China, owns more of the national debt than any other single country except Japan – a terrifying prospect as great power competition increasingly becomes more based around economic pressure rather than military intervention. And as situations in places like Greece and South Africa have shown in recent years, economic turmoil – which unmanageable debt usually creates – has a tendency to threaten domestic tranquility.

Fiscal mismanagement by politicians also needlessly threatens vital domestic programs. Prior to the pandemic, the U.S. Treasury issued a report in 2019 that was already warning that both Medicare and Social Security would go “bankrupt” (meaning they would pay less to beneficiaries than they promised) much earlier than previous estimates. Social Security is predicted to be insolvent by 2035, and Medicare by 2026.

Once again, this was the status quo even before COVID-19 and all the unprecedented spending it brought about. Today, the situation is even worse. Add to that the reality of rising inflation, supply chain issues, and a new CBO estimate that the annual economic growth rate is expected to fall to 1.8% over the next three decades after staying around 3.1% since 1951, and the outlook is not good.

So how can this be solved? At the moment, the radical Democrats in Washington are only interested in raising taxes and spending vast amounts of money. Democrats dubiously claim that their proposed tax increases would only target the very wealthy. But even if that were true, and most conventional wisdom suggests it’s not, their new taxes on businesses would further hamper economic growth and force companies to cut jobs, doing nothing to help an economy still struggling to recover from the pandemic-induced recession.

There is a better way – and our own legislative history proves that it can work. It was pioneered by Newt Gingrich and the “Contract with America” Republican Congress what won majority control of the U.S. House of Representatives in 1994. 

When Newt Gingrich became the Speaker of the House in January 1995, the Congressional Budget Office (CBO) was predicting that by 2004, our national debt would equal 56.1% of GDP, and we were on track to accumulate nearly $3 trillion more debt over that same decade. The debt was expected to stay around 51-52% of GDP over the next 3-4 years, rising to 56.1% in ten years.

However, when Gingrich left office in January 1999 (just five years later), the CBO projected $2.3 trillion in surpluses over the next decade—a $5 trillion turnaround, what would be the equivalent of a $9.6 trillion turnaround in today’s dollars.

Likewise, by the end of Gingrich’s tenure, the ten-year CBO outlook was that the national debt would only be 12.2% of GDP, a staggering 80% improvement from where that same outlook had been when he took the Speaker’s gavel. Everyone expected the debt would be well over 50% of GDP by 1999, but under Gingrich’s leadership it had fallen to 39.4%.

Gingrich and Congressional Republicans accomplished this astonishing turnaround through simple pro-growth, fiscally prudent economic policies – many of the very same policies that brought about the economic resurgence of the Reagan and Trump years. Low taxes, controlled spending, and less government intervention in business resulted in 11 million new jobs, an unemployment rate that fell from 5.6% to 4.2%, and four balanced budgets in a row for the first time since the early 1950’s.

Thanks to the policies of that Republican Congress, the country also achieved bipartisan welfare reform, which decreased child poverty by 25%, and nearly two thirds of those who left welfare were gainfully employed. In addition, these policies helped further spur entrepreneurship and investment. Venture capital spending grew by 500% in just three years, and the manufacturing sector grew to nearly 17.5 million jobs. Instead of adding to our national debt, we paid off $400 billion of it.

The kicker? Gingrich and Congressional Republicans accomplished all of this with a Democrat in the White House. By negotiating tough deals with the Clinton administration, Gingrich was able to bring the country back from the brink of financial disaster. President Clinton is today largely remembered fondly by fiscal conservatives for declaring that “the era of big government is over” and thereafter presiding over four balanced budgets in a row and a growing economy. But it was Gingrich and the Contract with America Congress that created and passed the policies that catalyzed the country’s turnaround from a looming debt crisis.

It is true that the current fiscal situation in the United States is horrendous. However, with the midterm elections just over a year away, history suggests that there is reason for optimism. As in 1994, the American people once again have the opportunity to recognize the dangerous path being tread by Congressional Democrats and send a new Republican majority to Congress to make it right.

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Joanne 4 justice
1 month ago

when you do not have $$$$$ do not spend it on stupid unsure schemes and I have been said it already ..
WEALTHY MILLIONAIRE AND TRILLIONAIRE BUSINESSMEN ARE NOT GOING TO PAY INFLATED TAXES !
THEY SAVE THEIR $$$$$$$ TO INVEST IT AND MAKE MORE MONEY!

Robert
1 month ago

So we know we have a big problem. There are so many reasons we got here. I was appalled that Ryan and MaConnell did not do a thing but make it worse. It is not all about tax cuts. It is about growing an economy while reducing spending. My proposal is limit every branch of federal government to one percent less than INFLATION growth for the next 10 years. We know we can’t grow our way out because the conditions needed for that plan to work NEVER develop. Stop trying the Same failed plans. They don’t work. Make a plan to valence the budget in 10 years and get rid of the FED.

Larry Pierson
1 month ago

This is the wrong way to approach the problem!!! The author completely missed the boat, and in failing to do so, continues to give allegiance to the massive theft that is continuing today with the Federal Reserve System (the fed). Every dollar we “borrow” from the fed comes from nothingness. The fed never possessed said dollar or the intrinsic value it represents until we ask for it to fund our “deficit”. Then, miraculously, the produce a dollar to borrow. Where did the value of that dollar come from? The fed never possessed it until it was asked for.
 
The obvious answer is simple. The newly printed dollar to help fund our deficit gets its intrinsic value from the value of all the existing dollars out there right now. This weakens the dollar in my wallet and is called “inflation”. By what authority does the fed have the right to take a portion of the value of all other dollars and suddenly call it their own without earning it? And then to add insult to injury, they demand we pay interest on what they took from us and then “loaned” back to us. And even if we paid back every penny “borrowed” from them, they are under no obligation to destroy said dollar and thus return its intrinsic value back to the rest of us. They get to keep it and thus own most of America.
 
Until enough Americans understand this concept, the greatest theft in the history of humanity will continue.

So how do we deal with the national debt? By declaring every dollar borrowed from the Fed, plus all the interest paid to them, belongs not to the fed but to the American people (which it rightfully does). The fed is nothing more than a very complex system whereby Congress can raise tax revenue without it actually appearing to be raising taxes using inflation is the mechanism to tax us.

Becky
1 month ago

The quickest way to fix this would be to tie congressional pay to the debt. Get us out of debt or make $20,000 a year.
And END ALL WELFARE!
No more aid to illegals, ‘refugees’, or the lazy and useless.
Work. Or starve.

Hal
1 month ago

Term limits for Senators and House Representatives … anyone? I have come t believe this is the only way we can nip the trend of making politicos rich or richer and non-politico and their supporters poor or poorer. And it should begin with TERM LIMITS.

Joanne 4 justice
1 month ago
Reply to  Hal

I will eat my Nurses cap if you are able to enact term limits within this . ADMINISTRATION IN THE WH.

Ralph S
1 month ago

Sorry to burst your bubble! The “Greatest Generation” created the “Baby Boomers” and the mess we’re in today… and tomorrow… and TOMORROW…!!!
The Greatest Generation survived the Great Depression and developed the mindset that said “I don’t want my kids to have it as bad as I did growing up…” Hence, they decided to never say “NO”
to their kids. They created a generation of selfish self-absorbed egotists. Now, instead of red-blooded Americans, only certain colors matter, and Dr. King’s desire for equality based on CHARACTER is ridiculed. Any politician who votes to increase spending and increase our national debt needs to be granted an immediate UNPAID vacation. Vote all INCUMBENTS O-U-T!

Ron Howard
1 month ago
Reply to  Ralph S

You sound as if you were not personally around during the period referred to as “The Greatest Generation”, because if you were you might have a very different view of that time. I was. Many of the negatives you charge “The Greatest Generation” with occurred between then and now. The reason that era was called “The Greatest Generation” was because it was during WWII when all Americans were patriotic citizens who loved their country, worked together, volunteered, collected cans and newspapers, suffered hardships, rationing, and shortages in order to supply and maintain our military. We were all loyal to America, not a political party, as is the case today. Today people are loyal first to the political party they are affiliated with before loyalty to their country. If you belong to their political party you are a friend, if not you are the enemy. My wonderful wife and I, who were married over 69 years before her death last year, watched the steady decline of society from the early 1950’s to recent times and were appalled at how over time, many parents not only ignored their children, and did not discipline them, but often spoiled and rewarded them just so they didn’t interfere with the activities of the parents. It was like “here is some money, go find something to do, just don’t bother us”. So I don’t know your age, but suspect you are probably from a more recent society trying to blame others from the past for the errors of the present.

johnh
1 month ago
Reply to  Ralph S

My parents were part of the GREATEST GENERATION & I appreciate all that they went through to give me the freedoms that Americans have today. Do not agree that they turned out children that do not have morals & discipline.

BlessdAmerican
1 month ago
Reply to  Ralph S

Your math is off. If you were speaking of a few generations AFTER the greatest generation, you might have a point. Even parents in the 1950’s didn’t raise spoiled kids. You’re blaming earlier generations for the mistakes of later ones.

The main reason that later generations were not as successful in life and raising their children, is walking away from God, failing to raise their children to KNOW God, allowing the Bible to be taken out of schools, common core, CRT, etc.

We have failed to heed the warnings of past history.

Joanne 4 justice
1 month ago

Folks US CANNOT AFFORD ANY MORE DEBT Contrary to Biden Peelosi propaganda RICH MILLIONARE ; AND BILLIONARE BUSINESSMEN ARE NOT GOING TO PAY INFLATED TAXES THEY SAVE THEIR MONEY TO INVEST AND MAKE MORE $$$$$$

Rik
1 month ago

When was the last time you heard ANY Republican just outright refer to ANY DEMOCRAT to what they ACTUALLY ARE? . . . and that is THAT THEY ARE COMMUNISTS!!!

Eddie Van Halen
1 month ago
Reply to  Rik

Yes Sir, we are ‘blood brothers’ as I “see” the same thing.

Xtech
1 month ago

and have for a long time! None of this is a surprise to me, it’s the culmination of 50 years of destroying the fabric of America!

Joanne 4 justice
1 month ago
Reply to  Rik

I agree Dems and progressives and left radicals are Communists and or Socialists trying their best to sabotage government !!!!

Philip Hammersley
1 month ago
Reply to  Rik

Sen. Kennedy comes as close as anyone! He compares them to rodents and other VERMIN!

Willy E
1 month ago

IMHO: We just came out of the Afghan war, which was a total waste of American lives and finances, thanks to Joe Biden and his CCP/DeepState/Establishment puppet masters. We went right into their new CoVid-19 biowar that completely terrified the world population to the point of insanity over the flu through manipulative and psychological deep state marketing methods, which may end up being classified WW3. Their goal is to depopulate the planet by 90% and rule the surviving 10% by tyrannical socialism. The “kill shot” booster jab is the next stage, and the sheeple will follow obediently. I would expect surges of invalids and dead people this next decade. Just follow the money.

If we can’t resolve our governments’ infighting between the Democrats and the Republicans we will follow the Titanic to the bottom. The Chinese Communist Party (CCP) has taken over the US Corporation Commander-In-Cheat Biden, the Democrat party, the RINOs have infiltrated and severely weakened the Republican party, and the resultant clusterFxxx won’t be easily stopped; but it can be. However, if we continue to sit on our collective butts, talking to ourselves, remaining silent in public as instructed, and waiting for some invisible entity to intervene and resolve our problems we will continue to move toward full socialism and tyranny, and the United States Corporation will rejuvenate its bankrupt self and finally destroy the real United States of America (unincorporated and asleep since around 1860) and we will no longer be a sovereign nation, just another dependent third world colony of the NWO, totally unable to think for ourselves and totally dependent on the government just to work and exist.

Wait until you see what they replace the “de-funded” law enforcement system with. We’ve suffered through millions of miles of “government red tape.” Just wait until you see “government blue tape” fully implemented; Washington D.C.,the Mexican border, Seattle, Portland, and most Democratically run large cities come to mind. Another ClusterFxxx.

Most rational people, when they get sick (and if you believe Mainstream Media, Big Insurance, Big Medical, Big Agriculture, Big Bankers, and Big Pharma, we are the stupidest, sickest, people in the world), go to see their M.D. or D.O. and/or just duke it out themselves. They don’t go to their Career Politician or their Bureaucrat to treat a cold or the flu. Unvaccinated Lives Matter, even though they don’t want to talk about it.

Humans are wired to control things, some are satisfied with dogs, horses, sheep, and cattle, but there is an “Elite” cult that insanely believes they are superior to all others and they must control the entire world population of humans; these insane people put on their pants one leg at a time just like everyone else and they must be stopped if humanity is to survive. Democrats can’t win an election without cheating and Republicans don’t know how to fight to win; what a farce it causes. Under our current election procedures, it appears that those who count the votes wins! Mass mailings of ballots, arbitrary deadlines for stopping the voting and counting the votes, a single party running the election, a lack of standards, and no photo IDs, are the cheaters best friend; these flaws must be remedied before the 2022 elections are held if election integrity and honesty is to be accomplished.

Eddie Van Halen
1 month ago
Reply to  Willy E

Would’nt it be great if little Dr. Fahucci was found in a pkg lot ?

Xtech
1 month ago
Reply to  Willy E

I agree with everything you said, with one exception: It was the electronic voting that stole the election and is NOT being investigated! Everything else is just a distraction IMHO. This is why I fear a replay of 2020 next time around:(

CLIFFORD F GERACI
1 month ago

Unfortunately there is a very different constituent to deal with. Rather than “the Greatest Generation” and the strong work ethic ” Baby Boomers” we now have lazy, entitled, socialism indoctrinated “woke” voters who value freebies over freedom, welfare over work, equity over equality and anarchy over law and order. This is how America will fall in only a few hundred years……definitely ….no Roman empire.

Ron Howard
1 month ago

One reason the Democrat takeover of America without firing a shot is working is because they learned something from the Roman Empire, “Divide and Conquer”. The Democrats separated us into groups and labeled the groups by party, by sex, by race, labeling Conservatives, “Trump Followers”, certain religious groups, non-vaccinated, and now, Parents, as Extremists or Domestic Terrorists. Does any of this sound familiar?

johnh
1 month ago
Reply to  Ron Howard

Divide & Conquer is also one of my biggest concerns in America today

Gerald G.
1 month ago

I think term limits and deficit spending go hand and hand. As many people in congress have said
to much power in one hand upsets the balance of power.

Gene
1 month ago
Reply to  Gerald G.

I absolutely agree.

Joanne 4 justice
1 month ago
Reply to  Gerald G.

lawmakers what ever U do DO not PASS THE EXTRAVAGANT WISH LIST BILLS ANY HUGE BILLS MUST BE WRITTEN IN AN APPPROPRIATE BIPARTISAN MANNER BEFORE APPROVED !

anna hubert
1 month ago

solution is simplerer than we think cut the unnecessary spending,cut down unnecessary beurocracy dismantle UN and plug the sinkhole called the aid to developing nations who started to develop the same time I did and are still at the stage of infancy and all domestic programs that promote dependency and the list goes on .I know it’s a fantasy but that is the only solution unfortunately there are not men in DC not even one

Steven
1 month ago

The problem is the American people have a very short memory. Everytime the Dems are voted out, their put back in. Each time they get back in, they do more damage to the country.

This time around it’s different. Let’s hope all the dimwits that keep putting them back in office wake up. Because IF there is a next time…it will definitely be our last.

Also any Republican that is elected to office in 2022 and beyond, needs to grow a spine. After reversing the damage that’s been done they need to go after the people responsible, and have them put away for Treason. Every last one of them!

Eddie Van Halen
1 month ago
Reply to  Steven

Two things have been going on here w/ the short memory –
Parents have to struggle to make ends meet so they can raise their kids ( in Communist schools )
and when they get home from work they just want to be ‘entertained’ by the damn TV set or their
computers. Then you have the fatherless homes. Black kids are left to fend for themselves.

And the border is CONSTANTLY being INVADED. If the border patrol were allowed S T K orders then there would be no problems like we now face ( drugs included ). No mistake that mexico is governed by the cartels – armed invaders ( MS-13 ). Formally, war must be declared on the mexican border for this nation to survive.

Joanne 4 justice
1 month ago

MANY EVIL POLITICIIANS ARE hoping for the public to forget their transgressions Example the Billary Clinton’s PEELOSI AND SCHUMER ETC ETC A GROWING LIST!

Gene
1 month ago
Reply to  Steven

Could not have said it better.

Paul W
1 month ago

Until the America hating, power craving communists, as well as their RINO abettors, are replaced in DC, a fiscal road map is about as useful to those goons as an actual road map is to a brain-damaged bullfrog. To return to fiscal responsibility in Congress, nearly every one of those idiots must go (with very, very few exceptions)…as well as the vast majority of bureaucrats and their bloated, redundant and completely unnecessary bureaucracies. Highly doubtful that’ll ever happen. Other than the tax cuts, pretty much every positive fiscal/regulatory achievement during Trump’s presidency was solely due to DJT…on his own. “GO BRANDON!”

Ron Howard
1 month ago
Reply to  Paul W

Am I confused or do the comments I keep seeing referred to “Brandon”, from the 9/11 flight where I think the call from Brandon was “Let’s Roll!”? Someone please clarify for me.

Paul W
1 month ago
Reply to  Ron Howard

Actually, the expression “Let’ Go Brandon” comes from an nbc interview after a NASCAR race in which Brandon Brown won Talladega. While he was being interviewed, the crowd began chanting “F— (the actual word) joe biden!”. A chant that seemed to start the first week of the college football season, where many in the stadiums around the country did that chant. The nbc reporter, either trying to cover, or really hard of hearing (I’m betting the former) said listen, they’re chanting let’s go Brandon. Trust me…that’s NOT what they were chanting!

Jesse Tiede
1 month ago

Mid-term optimism? Well, maybe, if we still had Newt Gingrich and Trump was President! But, really, how likely is THAT to happen? There are just too many with the “Gimee! Gimee!” attitude and don’t forget all the “Pay my student loans! Free College! Livable Wage For Everyone With No Work!”, and those who think Communism and Socialism are the way to go, even though those systems consistently fail, everywhere they are applied! God Help the USA! Please…

Eddie Van Halen
1 month ago
Reply to  Jesse Tiede

The answer ? We must become armed vigilantes for this nation to survive.

Myrna
1 month ago

2022 election could save the nation. I am praying for it.

anna hubert
1 month ago
Reply to  Myrna

only if the nation is willing to put the shoulder to the wheel

heil biden
1 month ago

cant pick up a history book the a…..holes are banning them

Eddie Van Halen
1 month ago
Reply to  heil biden

Damn revisionist history.

Stephen Russell
1 month ago

Map to Depression 2 ??

Chris
1 month ago

The Demoncrats have an alternative solution — inflate the debt away. By the time the bonds come due they’ll be worth a small fraction of their original value. Problem solved! Of course that destroys savers and ruins everything else, but hey, they got to spend the money they wanted to spend.

Eddie Van Halen
1 month ago
Reply to  Chris

Make sure your home is paid for and it is big enough to house relatives.

BAE
1 month ago

Joe Biden is doing a terrible job for the American people. He has no knowledge of finances, since he was on the take from the tax payers for over 45 years. He’s self-serving and a dope!

Eddie Van Halen
1 month ago
Reply to  BAE

BAE – Soros runs this nation through all his paid minions.
I wish Trump would have ‘dealt’ w/ him and his fam.

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