The recent federal money dustup between Democrats and Republicans, big spenders versus less big, featured a bill longer than Leo Tolstoy’s War and Peace – 1,500 pages. This is the tip of the iceberg. What is coming is a fight for fiscal sanity. Next year, we will hit the full iceberg.
What people do not appreciate is how irresponsible our federal leaders have been over two and a half decades, in particular the U.S. Congress, especially when Democrat-controlled.
Baseline facts explain how we got here, and how – with Trump-Vance pushing to re-rationalize the spending process – we may start to get out.
The last time the U.S. economy was in rough balance, the same amount of money coming in as going out – with modest debt – was in 2000. That year, Bill Clinton was president, economy humming.
That year capped a long stretch of rough balance, after Carter’s recession. The prior 20 years saw Reagan bring the Soviets to their knees, contain Iran, rebuild our defenses, and sign a 25 percent income tax cut, as well as the first Gulf War under George HW Bush.
By 2000, which now seems ancient, we had a mere 18 billion increase in national debt, an annual surplus of 236 billion. While Clinton ran large deficits from 1993 to 1997, balance loomed.
Then, suddenly, we got 9-11, which justified defense expenditures to hit Afghanistan. But George W. Bush, unlike his father, did not stop there. By 2002, we were spending wildly, uptick unmanageable. We had a 158 billion deficit increase, 421 billion added to the national debt.
Then came Iraq, in retrospect surreal. Rather than stop in Afghanistan, those around Bush 43 – led by Liz Cheney’s father, Vice President Dick – decided we needed to expand the war to Iraq.
Facts say it all: Between 2003 and 2008, Bush-Cheney posted massive deficits, our debt increasing in 2003 by 555 billion, in 2004 by 596 billion, 2005 by 554 billion, 2006 by 574 billion, 2007 by 501 billion, and 2008 by 1,017 billion. Those are annual increases.
Punch drunk by 2009, Obama took us to a new level of debt. His increases – to fund schemes from nationalized health to socialized everything – were stunning, 25.2 percent of GDP.
Obama did not stop there. The highest annual deficit – a shortfall of revenue to spending – was 458 billion before Obama, and the last Republican congressional deficit was 161 billion. But Obama’s first four deficits – in order – were 1.41 trillion, 1.29 trillion, 1.3 trillion, and 1.32 trillion. Wild spending got normalized. The year before Trump, Obama added 1.42 billion to the debt.
Then came Trump. Using the old-fashioned notion that money left in taxpayers’ pockets generates more income – for the whole economy – than bureaucrats who produce nothing, Trump cut taxes. The economy surged. Growth surged. Deficits shrink when growth outpaces debt; it did.
However, no fault of the president’s, the Chinese virus hit America, creating panic, a costly health crisis, and cascading crises as liberties were restricted, and mandates issued. Growth could not keep up with spending.
In the midst of this foreign-origin shock, trending toward recovery by 2021, Biden went on another spending spree. Reversing Trump’s growth, Biden shut down America’s energy independence, penalized small businesses, pushed entitlement, and flipped the table.
As his tenure continued, a spendthrift congress risked fiscal chaos. By 2024, we had rolling deficits of 3 trillion, spending no one wanted, trillions added to the national debt, now over 36 trillion. Worse, Biden’s inflation spiked interest rates, which also applied to our debt.
So, here we sit. Last week, the media had a coronary when word of a possible shutdown – which is never really a “shutdown,” since “essential” workers keep working – was floated. Fearing political fallout, most Republicans and all Democrats threw in the towel and passed more spending.
Friends, brace for impact: We have not yet faced what is needed – likely redlining programs, agencies, and departments for balance. This was just the tip of the iceberg. Next year, we hit the full iceberg. Massive debt is simply not sustainable. Restoring fiscal sanity is now essential.
Robert Charles is a former Assistant Secretary of State under Colin Powell, former Reagan and Bush 41 White House staffer, attorney, and naval intelligence officer (USNR). He wrote “Narcotics and Terrorism” (2003), “Eagles and Evergreens” (2018), and is National Spokesman for AMAC. Robert Charles has also just released an uplifting new book, “Cherish America: Stories of Courage, Character, and Kindness” (Tower Publishing, 2024).
