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Three Ways To Defuse the U.S. Debt Bomb

Posted on Tuesday, December 5, 2023
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by Outside Contributor
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44 Comments
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Three critical things actions took place in 1913. Proposals establishing the federal income tax and direct election of senators were adopted through constitutional amendments. In addition, the Federal Reserve was established via statute.

These three actions fueled the federal government’s growth, undercut states’ rights, and enabled the federal government to manipulate interest rates and self-deal in its own debt.

As a result, the federal government is 10 times bigger as a percentage of the economy today than in 1912, and it is still growing.

Congress controls less than 30 percent of the annual budget, down from 97 percent controlled in 1912. Stated differently, the federal government has written a blank check for more than 70 percent of federal direct spending, and the more than $1.5 trillion in annual tax expenditures are not controlled at all. Ninety percent of federal spending is not part of the yearly budget. What kind of budget is that?

Congress has passed all the annual appropriations bills by the beginning of the fiscal year just four times in my lifetime.

Federal debt/GDP has reached record levels and is still increasing.

Total liabilities and unfunded promises of the federal government now exceed $125 trillion, which is five times our GDP and about $380,000 for every man, woman and child in the country.

Interest is the fastest-growing federal expense for which we get nothing!

In less than 10 years, the Social Security and Medicare HI Trust Funds will be exhausted. Yet, the leading presidential candidates do not want to touch them. This is unacceptable and an example of laggardship rather than leadership. 

It is time to recognize reality.

The federal government has grown too big, promised too much, subsidized too many, lost control of the budget, and undercut states’ rights under the Constitution.

Clearly, we are on a fiscally irresponsible and unsustainable path. In fact, every major federal fiscal and monetary agency has publicly agreed with this statement for several years.

Failure to act is not an option because it directly threatens our future economic prosperity, national security, international standing and domestic tranquility.

The bad news will ultimately flow to the states and the American people.

Unfortunately, the debt ceiling has failed to constrain the growth of the government and limit mounting debt burdens. Other statutory fiscal constraints have also failed.

As I testified before the House Budget Committee in March, three steps are necessary to defuse our ticking federal debt bomb.

First, STOP THE BLEEDING — Cut federal spending levels for Fiscal 2024 from the bloated levels of Fiscal 2022 and 2023. Federal spending in Fiscal 2023 was 40 percent higher than the pre-COVID levels of Fiscal 2019. We will see what happens when Congress passes the Fiscal 2024 appropriations bills.

Second, STABILIZE THE PATIENT — Create a statutory Fiscal Sustainability (or Debt) Commission to educate and engage the American people with the facts, the truth and the tough choices. After doing so and soliciting input, make a package of recommendations to stabilize debt/GDP at a reasonable and sustainable level by a year certain, which package would receive an up-or-down vote in Congress. Fortunately, bipartisan bills to establish such a commission have been introduced in both houses of Congress.

Third, CURE THE DISEASE — Adopt a Federal Fiscal Responsibility Constitutional Amendment that would limit the growth of government and cap debt/GDP at a reasonable and sustainable level absent a formal declaration of war or limited and unexpected circumstances with a super-majority vote in Congress. Such an amendment should be ratified by state conventions of pledged delegates like the 21st Amendment. This is the closest thing to a vote of the people under our system. Switzerland adopted a similar amendment about 20 years ago with 85 percent support from Swiss voters and very positive results.

Shockingly, in 1979, 39 states had active Applications for a Convention of States to propose a Fiscal Responsibility Amendment. Thirty of these applications were limited solely to fiscal responsibility, thereby providing a critical safeguard against a so-called “runaway convention.”

Despite this, Congress has failed to act, denying the states their equal right to propose amendments under Article V of the Constitution. This is unacceptable and unconstitutional.

Remember these key lessons from history:

First, when George Washington made his farewell address, he issued four warnings. They were to avoid excessive debt, avoid foreign wars, avoid regionalism and avoid factionalism (or political parties). How are we doing?

Second, Rome was arguably the greatest superpower in history. It was a republic for 500 years and then became an autocracy for an additional 500 years. Rome fell for several reasons. They included fiscal irresponsibility, political incivility, moral decline, an over-extended military and the inability to control its borders. Does that sound familiar?

We must learn from history and others and take the necessary steps to create a better future. “We the People” are responsible for what our federal leaders do or fail to do. We owe it to our country, children and grandchildren to act and restore our stewardship duty for the future.

Reprinted with permission from The DC Journal by David M. Walker.

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PapaYEC
PapaYEC
4 months ago

Deport all illegal aliens.

PapaYEC
PapaYEC
4 months ago

Expatriate and deport all Democrats.

Jim McDowell
Jim McDowell
4 months ago

Bravo! The reason no solution to these problems will ever happen? Because the U.S. voter population has been dumbed down by years of bad schools and inadequate education at the K-12 level. Voting today is a popularity contest. Many people can’t even tell you who the first President was. Then they laugh and smirk in their ignorance as though it was a really tough question that no one would be able answer.

Rob citizenship
Rob citizenship
4 months ago

Well researched article David Walker , It should be appreciated by those who sense the sort of responsibility you mentioned in the last paragraph. I am 73, have been involved with toolmaking , navigation, and microscope systems for water quality over the years. Mathematics is a form of reasoning. And that is a very important concept for dealing with anything , especially of an unexpected nature. I usually regard thought about financial matters by simplifying the situation within the framework of what good management , good decision making is all about – Planning, organizing , scheduling , intelligent , clear communication. And having an optimistic , positive approach helps too.

Thinking
Thinking
4 months ago

The income tax and the federal reserve created in 1913 was done by Rothschild and the illuminatie. They wanted to start interest payments on loans. That way they could get richer than ever before. Loan the poor man money and have them pay it back 3-5% more than they borrowed. And this has brought us to the humongous deficit of today. We haven’t spent within our budget ever under the dems. And under ole Joe they went wild, spending money and printing money. Which brought nothing to the people but inflation and homelessness. The left thinks throwing money at the problem solves everything. Billions of dollars for the Ukraine, and still Putin is winning. Billions of dollars for the migrant problems and they still sleep on the street. 12,000 people in one day came into our country, that we know off, and where is ole Joe putting them, no place, as Mayorkas says the border is secure. The states are broke. Sanctuary states don’t even want them. Why? because ole Joe has no plan what to do with them.
We need to go back for congress to say where and how much money is being spent. Balance the budget. Only then will we be strong again and a force to reckon with. Nobody can buy protection.

Judith
Judith
4 months ago

The Federal Government’s job is basically 3 things. 1. Protect our borders. 2. Up hold the laws. 3. Maintain infrastructure.
Get rid of all the wasting-rest-too-big Federal Government.

Scott L
Scott L
4 months ago

Controlling government spending is like a wino trying to drink himself sober.

It won’t ever happen, because it can’t.

Maybe if you introduced a program whereby for every dollar of deficit spending, each member of Congress takes a whack to the knees with a baseball bat, it might scare them for a moment. But they’d get around it.

Besides, who has ever volunteered to cut their own program? Everybody knows there’s tons of waste, but it’s never their program. “My department is agricultural aid to butterfly ranchers in Paraguay — we *need* that!”

Kyle Buy you some guns,and learn how to shoot
Kyle Buy you some guns,and learn how to shoot
4 months ago

The downfall will suite O BAMA just fine. Kyle L.

Bob
Bob
4 months ago

The three steps sound good, but you are dreaming. How many Federal programs actually solve a given problem? Although I am not Vivek Ramaswamy supporter, he did suggest a way to curtail spending, the Zero-based budget where the agency has to justify each dollar spent to be refunded. A concept worth looking at. The Fiscal Sustainability Commission sounds good but will be a partisan politics useless group. The Constitutional Amendment, maybe. To succeed would require our elected officials to exhibit some form if integrity as well as fiscal responsibly and leave their party affiliation at the door.

A concept worth looking at,

Brian
Brian
4 months ago

Dismantle HUD, Dept of Education, BATF, EPA, and any of the despotic agencies. Force ALL bureaucrats salaries to 80% of comparable private sector jobs and no more cadillac benefits (ALL go on Social Security).

Richard Hennessy
Richard Hennessy
4 months ago

A good start on fiscal responsibility would be to STOP funding programs and projects that are the responsibility of state or local government, that is, programs and projects that aren’t NATIONAL in both purpose and scope. State and local governments have their own sources of revenues and are better able to determine the relative importance of local programs and projects. If local programs and projects aren’t high enough in priority to be funded at local levels, they shouldn’t be funded.

Thinking
Thinking
4 months ago

Moron, that will do the trick? Why not increase it to 95%. For if you don’t stop spending, any amount is never enough for you people. Educate yourself.

James K. Keenum
James K. Keenum
4 months ago

First, David M. Walker needs to be the Speaker of the House. Secondly, only God can restore this Nation through His promises from Isaiah Chapter 28. Every God fearing, freedom loving American needs to get on his knees tonight crying out to God to invoke Isaiah 28 or we are truly toast as a Nation. Thirdly, as for Art Warmack comment about what happened to Israel and her people on October 7th, with the raping, killing, mutilating over 1500 hundred women and children, Israel has every right to bring justice to such evil brought upon her people.

michaelR
michaelR
4 months ago

The vast majority of our debt started when…….?……Obama!! Goes to show us how inept the vast majority of politicians are when it comes to running businesses. Trump was the first one to come in and recognize their ineptness. That’s one of the reasons the crats are in melt down.

Mendon Patriot
Mendon Patriot
4 months ago

The Flat Rate is a good idea, only 10% for everyone. Build in some fair standard deduction for those making less than 50K.
As for your idea of 63%, keep in mind Margaret Thatcher’s definition of Socialism – “Sooner or Later, you run out of other people’s money”.

Pat R
Pat R
4 months ago

Governments believe that money really does grow on trees (via taxes, fees and credit). The fact Congress doesn’t use their given power to force the government to live within its means is because they feel no true sense of responsibility to the citizenry they supposedly represent. That’s what the introduction/use of “credit” has done to a previously responsible citizenry, companies and the government.
Take away credit and we all have to live within our income or suffer the consequences. Government has no consequences really because The People bear them for government’s choices/decisions. Term limits would go a long way to fixing the overrun budget issue. Make term limits an actual ballot issue; states have it for their leaders.

Sallo
Sallo
4 months ago

I’m afraid that wouldn’t “do the trick”. As you have no doubt seen, when we have “more” money, we spend “even more”. I don’t know who’d decide “the rich”, either, nor how to close loopholes, not to mention those “rich” who provide a lot of other benefits, such as hiring, manufacture, donations…

SC voter
SC voter
4 months ago

Make a start by placing term limits on congress.

Robert Zuccaro
Robert Zuccaro
4 months ago

You’re not a math major are you? 2020, the bottom half of taxpayers earned 10.2 percent of total AGI and paid 2.3 percent of all federal individual income taxes. The top 1 percent earned 22.2 percent of total AGI and paid 42.3 percent of all federal income taxes. But if you taxed EVERYONE in America, from the very poor to multimillionaire, a flat rate if 63%, it wouldn’t even come close to treading water even if all 330 million Americans were “rich”. Its valuable for one thing: a nice slogan to get dumb people to vote Democrat though.

grin n bear it
grin n bear it
4 months ago

yes and you protect the country right???

Joe McHugh
Joe McHugh
4 months ago

“The National Debt will soon bankrupt us!” Um, …….. now where have I heard that prediction before?
The National Debt is now over 33-trillion dollars and growing like Topsy. I will say it right now, the National Debt could grow to be 66-trillion dollars and the political pundits would still be warning us about a pending bankruptcy.
Here is one suggestion to address the politician’s tendency to spend borrowed money, Reduce the interest paid on that debt to .0000000000000001%. Furthermore, de link the interest on the National Debt from all other financial loan types. O.M.G.! The sky will surely fall if we did anything like that! ………. Not really.
The reason that our public debts have not crushed us so far is that the other developed countries behave even worse than we do. You want to invest in a safe security in the European counties? Get ready to be robbed because many of those countries charge NEGATIVE interest. Yep, take 10,000 Euros to buy government securities and in ten years you can redeem them for 9,500 Euros. That’s why many foreigners purchase American Treasury Notes, and Government Savings Bonds, i.e. because American securities still earn interest.
Question: Why hasn’t our 33-trillion dollar national debt bankrupted us? Answer: Who has the authority to take our government to bankruptcy court? Also, what court would have the power to adjudicate a national bankruptcy? Worse, who would oversee the terms of such a bankruptcy, the government? What a laugh, the government is the entity that is causing our financial woes.
The real danger in the government’s spending of ever more borrowed money is that other countries might create a basket currency to replace the dollar as the preferred trade money. Then what? Obviously, all imports would cost more money. However, that wouldn’t be the end of the world for America. We, as a country have the ability and the resources to manufacture all that we need without imports from other countries. We are moving in that direction anyway, because of automation powered by robots.
There is only one serious danger that America faces, namely socialism. Historically, socialism has always failed as a political model for government. The countries that still try to use socialism only struggle along by using brute force on their people. If the Democrat Party gains immutable power, we will become just another basket case country with the people existing in sullen misery. The catch to keeping a free society is that all competent adults are expected to earn their own way and not look to the government for “freebies”. Imagine that, working to earn the money to buy the things you need, ……revolutionary!

Daniel
Daniel
4 months ago

I like that idea of a fiscal amendment. We should have had it back when gold no longer backed the dollar in ’71

Michael
Michael
4 months ago

Yes, let’s trash these “secular churches.”

Jerry Meadows
Jerry Meadows
4 months ago

There is one very important issue here that I must have missed. The Federal Reserve system needs to be trashed along with all the beaurocratic agencies such as the EPA,ATF,OSHA,FBI,HUD,etc. Along with Homeland security etc. and the FDA could use some seriously needed trimming of it’s power. Bottom line, Congress and the Senate need to start working instead of creating these agencies to do the job that the elected officials are supposed to do. An amendment eliminating lawyers from running for public office might save money since making laws is how lawyers make their living.

Michael Nugent
Michael Nugent
4 months ago

I so agree, let’s make this our goal for ????2024.

Robert Deighton
Robert Deighton
4 months ago

I had discussions with Mr. Walker about 12 years ago. I was developing a program to reduce the existing debt, which was then $16 trillion. He introduced me to Committee for Responsible Federal Budget (CRFB). My message was that the only way to control the “unsustainable” debt is by paying down the EXISTING debt. After several discussions, I was informed that their focus was on controlling FUTURE debt, not existing debt. The debt will soon be $34 trillion . The Fourth, most effective, way to defuse the debt bomb is by paying down the existing debt. It’s not too late, we have an outside the box solution. MFS Patriotic Capitalism is very compatible with Amac. Let’s renew our discussions and get it done. contact [email protected]

grin n bear it
grin n bear it
4 months ago

yes,make sure those RICH pay their fair share.??? stop handing all this money to border jumpers,let jbiden use his money (44000 000 )???

Emceegee
Emceegee
4 months ago

##4. Create a new Pecora invedtigation such as was done under FDR and change the banking system. Wipe out all speculative debt.

anna hubert
anna hubert
4 months ago

We would have to have responsible accountable America first members of government not the leaches that are there now and every citizen responsible for every aspect of his life That would be a true miracle

Art Warmack
Art Warmack
4 months ago

Anyone beulieving this nation can overcome its debt problems was most likely dropped on their head as an infant or is ready for a “skilled nursing facility” as in……..Joe Brandon.
We are now having understandable problems finding foreign morons to purchase our debt in the form of US Treasuries. Our credit standing is down and will never get better. There is nothing anyone can do, much less placemats like Yellen to solve the problem. One way would be to declare some sort of national bankruptcy and face the fall out from that. My goodness, the US may be forced into ceasing the forever wars it initiates monthly it seems. But the bought off politicians will never go for that. Hell we have a board member off Raytheon as our morbidly obese Defense Secretary…..a “General” that has never seen combat and may have never been within earshot of……..a rifle shot. We are owned by the defense industry so we follow their leadd and enjoy slaughtering, now with Israeli assistance, innocent civilians for the crime of attempting to break out of a racially established ghetto named Gaza.
You cannot polish a turd and the US cannot fix its debt problem……ever. Like a cheap burger patty from McDonalds, we are over done.

Chuck
Chuck
4 months ago

Oh no not the ‘constitutional convention’ proposal again. 34 plus states can petition congress to call for a convention. the U. S. congress calls the convention; not the states. Congress controls it, not the states. Then everyone gets into the act. Scores of judicial scholars have testified that a constitutional convention is autonomous. It has authority to do what wishes decides to do. You want to have a constitutional amendment to control spending? Fine let’s do it the quick and right way 27 amendments have already been approved. Add just one; not throw up the entire constitution. A quicker way is to abolish all unconstitutional federal agencies. Studies have shown that to be 80% of them. That would automatically balance the budget!!

LMB
LMB
4 months ago

There is a Fourth!! A Debt Jubilee for everyone!!!

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