You Should Be Furious....
/In late January 2020, the liberal on-line new source Slate published an article with the headline, You should be absolutely furious over Donald Trump’s $1 trillion deficit.
I’m inclined to agree. Deficits can be good policy under certain limited conditions, but they are irresponsible and bad most of the time. The writer of the article, Jordan Weissmann, lists several reasons why he thinks we should be angry about the Trump deficit:
The Trump tax cut benefits the wealthy more than middle class taxpayers.
Republicans are inconsistent about deficit control, demanding fiscal restraint when a Democrat is president but running up the deficit under Trump.
Republicans will probably use the deficit they’ve caused as an excuse to demand spending cuts when the next Democrat president is elected.
Weissmann is a capable writer and knowledgeable about economic matters. His article touches all the usual economic and political issues relating to chronic deficits. But what does he leave out? It’s this: there’s not a word in his article about the moral injustice of piling debt burdens on future generations.
Is all this debt something to worry about? As far as the economy goes, no, not really. Washington may be borrowing a great deal of money, but we can probably handle it just fine.
The main reason economists have traditionally warned governments against borrowing too much is that doing so could slow down the economy by pushing up interest rates and “crowding out” private investment. In theory, a country could also end up trapped in a debt spiral, where it can no longer meet its interest payments and is forced to default. But for developed nations that print their own currencies (sorry, Greece), those aren’t really serious concerns these days.
Saying “we can probably handle it just fine” does not mean he thinks the country can pay the debt off. He only means that interest payments (to rich investors from now to the end of time) are unlikely to collapse the nation’s economy or hinder its ability to borrow even more. As I’ve noted in another article, interest on the national government debt is around 15% of all federal government spending, and that is true because interest rates are low. The government spends more on interest on debt than it spends on all programs for children.
To make his position clear, Weissmann repeats his three reasons to despise the Trump deficit budget. The three reasons he gives are political hypocrisy, unknown risks, and constraint on potential future deficit increases to fund Democrat priorities. Again, not a single thought to moral justice.
How out of control is the issue? Here is a liberal writer. He devotes himself to listing reasons to despise the deficit. He proves his concern about social justice and fair distribution of tax burdens by noting that the rich benefit more than middle class taxpayers. And yet the fact of future generations being saddled with this debt (which won’t benefit them at all) doesn’t even enter his mind!
