COVID-19 Stimulus / Opinion / Politics

Sending Up a Flare – On Federal Debt

debtDo you see that flare – on the far horizon? That flare marks federal debt – and a need to do something about it.  This is not the time, not yet, but it is coming.  Keep one eye on that flare.

Saving the American economy, after the sudden shock of COVID-19 and lockdowns, has required pedal to metal policy – to stave off bankruptcies with stimulus checks and loans.  All that is good, and necessary. We may even need a last stimulus, to restart what stopped cold.  But then, we all need to look hard at our national debt.

Some will say, as President Trump proposes more rescue spending that borrowing is part of life. That has certainly been true for the federal government, especially as debt accelerated in the mid-1960s, and then accelerated again in the 2000s.

Today, our federal government owes $26 trillion dollars, a number that boggles average minds like mine. If you doubt that number, look at the “US debt clock,” then consider the long-term impact of such massive debt. See

For historical perspective, wars and economic crises are expensive and tend to produce debt.  Over the past 20 years, we have experienced two wars and two downturns, with COVID-19 the third and most severe economic downturn.

History tells us debt is used to bridge periods of instability, insufficient liquidity, and societal uncertainty.  Debt is how we finance living standards during such periods and costly wars – and all wars are costly.

Not surprisingly, unpaid federal debt before World War I was several billion dollars. By 1950 – after two wars and a depression – US debt stood at $253 billion.  The COVID crisis triggered an abrupt economic hit – which has, like it or not, required emergency spending, and thus debt.

But wars and downturns are not the whole story.  Starting in the mid-1960s, another source of debt emerged – and it remains the bowling ball in the bag, the chief cause of why we are more indebted than ever before in our history.

The new source of national debt – in a word – was irresponsibility, a combination of irresponsible spending in every decade since 1960, and irresponsible financial management.

Put differently, in the mid-1960s, federal entitlement programs – especially Medicaid – triggered ever-widening federal obligations. The obligations were undertaken with varied motives, some noble and others purely political.

Regardless, successive congresses and presidents have been unable – or unwilling – to initiate program cuts, consolidations, restructuring, or policy fixes to make entitlements solvent.

Worse, as dependence has grown, so has the tendency to keep adding benefits, which has meant more debt.  This debt is often disguised, for example when Democrat-controlled states increase health and welfare benefits for illegal aliens and sanctuary cities, or overspend on pension plans, then ask the federal government to backfill.

So, the first reason for mass debt is uncontained, uncontrolled growth of entitlements. If we care about the future, we must address that.  Thoughtful policy makers can make entitlements solvent.

The second reason is the idea that, once a honeypot is discovered, it should be emptied.  In effect, federal leaders – especially Democrats – have gone beyond crisis and war spending.  They are in tax and spend rhythm, making private dollars public to buy constituent dependence.

Democrats are not alone in pushing this slight-of-hand – but they unremitting.  Thus, over eight years of Barack Obama, the federal debt rose from $10 trillion to $19.5, effectively doubling.

The comeback is that George W. Bush waged two wars that pushed debt to $10 trillion from $6 trillion, a fair critique.  The critique, however, does not excuse runaway spending that followed.

Some will say that President Trump’s 2017 tax cut, which returned hard-earned money to taxpayers, amounts to creating debt by reducing tax receipts – except that is not true.  Like Ronald Reagan, who cut personal taxes by 23 percent, Trump cut corporate taxes from 35 to 20 percent, doubling the standard deduction, and repealing the Obamacare tax. The result under Reagan and Trump was explosive economic growth – powering higher tax revenues.

In short, letting people keep their own money creates a multiplier effect, proving supply side economics works.  A dollar left in private hands “bounces” – that is, creates up to 16 jobs – while a federal dollar buys a bureaucrat, having produced no saleable goods.

All this explains why we face huge federal debt, poised to fall like on rock on future generations – unless we repay it.  If COVID-19 and lockdowns hamper us, the future offers a chance.

What would help right now is a series of three moves – and this may be the time to make them.

First, the economy must reopen – and Americans need to strive to restore robust, unprecedented growth in jobs, income, and output to pre-COVID levels. President Trump has shown how to do this – namely, trust yourself, the free market, and work hard.  Then, do not look back.

Second, we need to stop excess federal spending on non-crisis programs.  What we do not need is more of what House Democrats are trying to foist on average Americans, spending on unnecessary, unpalatable, power-centralizing socialist programs.

A simple inventory of potential waste in Speaker Pelosi’s last five “emergency” bills, most of which was stopped by Senate Republicans, would embarrass anyone who served in either chamber in a prior era.  Nor would they understand those pushing America to veer socialist.

Third, we need to relook entitlement programs, as if debt mattered. We need to hold spendthrift states accountable for overspending, restructure for solvency, match federal financial planning with incentives for private saving, and gradually reduce centralization, taxation, automatic spending, citizen dependence, waste, fraud, and knowing political largess – thus, federal debt.

Today, we are lucky that interest rates are low.  That is helping us carry the debt.  Still, if they rise, we will see that debt clock spinning so fast the numbers blur. We are also lucky that, once COVID spending passes, President Trump is determined to promote dynamic growth.

Bottom line: Our mission is not to forget the debt. That flare marks the spot – and we need to do something about it.  The time is coming.  Keep one eye on the flare, as we will soon be there.

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Sempronius Densus
2 years ago

Mr. Charles paints a truly grim picture of the future of America using stats on what he calls our debt. What he totally ignores is the whale in the room which is unfunded liabilities of the federal government which exceed $120 TRILLION, a number so astronomical as to be difficult to even grasp. So while he does point out the problem with “hard” debt, leaving out the unfunded portion of the governments liabilities, items like social insecurity, medicare and medicaid, combined with all the government pensions that many people rely on to survive, his picture is completely inaccurate given the fact that those unfunded liabilities are at least 4 TIMES what the hard debt is, though they ARE a liability for which the federal government is obligated to pay. Of course, the “government” does not create any money, it simply TAKES what it wants from all the people who DO create wealth using laws that most of the legislatures never even read, or worse, that those same traitors do not ALLOW their fellow legislators to read as Piglosi did in her now infamous remark about having to pass the bill before getting to read it!

In reality, every problem we face today has at its root cause actions taken by the federal government that push people towards decisions they might otherwise never make. The so-called “Great Society” bill signed by the notorious criminal LBJ is a prime example of government laws that pushed people to change their lives, and in this case, even their moral values for it has led generations of people to A) become totally dependent upon government largesse to make ends meet, while destroying family values that lead to an explosion of unwed mothers and irresponsible fathers, all of which existed in statistically much smaller numbers prior to that heinous bill.

So, Mr. Charles has, for whatever reason, ignored the massive whale in this issue of unfunded liabilities, a fact that cannot be ignored financially as it is costing taxpayers trillions annually though it has NO possibility of EVER being repaid by any method OTHER than a total repudiation of the debt that will involve the total collapse of the dollar and with that event, the complete collapse of our economy and our society with it. For those who are unaware of the historical impetus behind many of the decisions made by congress, one need only read about two issues, those being the “New World Order” by which “leaders” around the world (who are actually traitors) have long planned to enslave us, and a little known but factual document referred to as The Kalerghi Plan. For those willing to invest the time, research on these two subjects will lead you to the inevitable conclusion that, with very, very few exceptions, everyone in our government is and has been involved in a true conspiracy to enslave all of mankind under their “rule”.

None of this will ever change without a total restoration of our Constitutional Republic, which effectively no longer exists, actions that must include the arrest, conviction, and execution for Treason of every leader who has colluded to force their tyranny upon us, for NO American has voted for what they intend to do as the legislators always conceal their true motives under the dark of night, just as they did when they met at Jekyll Island over 100 years ago leading up to the creation of the clearly unconstitutional Federal Reserve, an entity that is neither federal nor does it have any reserves, for all the wealth they have stolen has long since been distributed among the international banking syndicate that created and controls the Fed.

2 years ago

President Trump has initiated bold, aggressive programs to deal with the lethargic economy inherited from the Obama administration, and America has benefited tremendously. Okay, Covid reversed the momentum, but we will get it back. In fact, I’m surprised by some of the numbers that show less unemployment than expected and more economic activity than forecast by the experts.
But we’re still hurting from a pandemic that can’t be tamed. Once the vaccine becomes available, though, and America gets back on track, Mr. Trump should address all those issues that rile us conservatives. States should have to pay the price for welcoming and footing the bill for those who did not enter the country legally if they refuse to cooperate with ICE. The federal government needs to root out fraud and waste, and to cut budgets across the board. The president has done it before, and he can do it again; bold action is what is needed.

2 years ago

End Medicare and Social Security now! These are FREELOADER SOCIALIST PROGRAMS (read the book “New Deal? Raw Deal!” by Jacob Shelverson to learn more about the avowed communist FDR, who collaborated with Stalin to take down a democratically elected leader and sacrifice hundreds of thousands of American lives in the process.

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