#94 - The National Debt Is Out of Control

My taxes went down with George W. Bush’s tax cuts in 2001.  Like all Americans at the time, I thought this was a good thing.  

At the time, the National Debt approximated $12.5K per person.  Today that number is closer to $61K per person.  That's an increase of almost 5X in a mere 17 years, in just the blink of an eye.  How could it have gotten so bad in the time it takes to raise a child and send then off to college?  Assuming they can afford college...

Shortly after the Bush tax cuts, our world changed as passenger jets became missiles targeted at the World Trade Towers and the Pentagon and another crashed in a peaceful field in Pennsylvania. Beyond the impact to our national psyche, the subsequent costs to our economy and our society were massive and included the creation of yet another government entity, the Department of Homeland Security to coordinate our defense.  But strangely enough, despite the increasing costs that our country had to bear, no one came to ask me to pay my fair share.  Sure, I hung out the American flag like everyone else, but the additional costs were merely added to our country’s debt.  I didn’t pay a dime.

Not long after 9/11, America began our war in Afghanistan. We were certainly not going to sit back and take a defensive posture. We were going to retaliate, we were going on offense to find Osama Bin Laden and hunt him down like a dog.  I was all in on this. I wanted payback. I wanted justice. But still nobody asked me to pay my fair share. The costs were simply added to our national debt, and they are still being added to our national debt today, for this war is still raging on, some 17 years later. 

To make matters worse, we couldn’t be content with just one war, we needed more. So we turned our sights on a war with Iraq, which was predicated on either (you pick it) the stupidity or the dishonesty of the Neo-cons in the Bush administration who falsely concluded that Saddam Hussein was sitting on a stockpile of WMDs.  With Shock and Awe, we would be greeted with open arms, we would free all the little people and we would be in and out of there in twenty minutes. Right, that worked out well.

[For the record, the day the Bush  Administration announced there were no WMDs in Iraq was the day I stopped voting Republican]

I was too old to serve in both of these wars and so my share of the burden was picked up by the brave service-oriented volunteers in our armed forces and equally by their families, a group which represents less than 1% of our population. Still, nobody came to ask me to pay my fair share. The added costs of both wars just went to increasing the country’s debt.  I didn’t have to pay a dime.

In 2008, our economy, nearly crashed and burned when the sub-prime housing market tanked and almost took the rest of us down as well. My investments tanked, but the governments TARP program and federal stimulus and I believe, some steady leadership at the top, pulled us back from the brink and we recovered.  My investments recovered as well. Still no one asked me to pay my share.

And, while you might find this hard to believe, my luck was about to get even better

The Republicans came along in 2016 and took the trifecta winning the Presidency, the House and the Senate, but instead of holding to a now forgotten heritage of managing with fiscal responsibility and instead of asking me to pay my fair share, the Republicans did me a solid.  Not only did they lower my personal income tax rate, even more noteworthy, they lowered the federal income tax rate for my company (of which I am CFO) and all the other corporations in the country from 35% to 21%. That’s a reduction of 40% year over year. 40%!!  Wouldn’t you like it if your bank lowered your mortgage payment 40% and explained to you that they were doing it to Make America Great Again? Pretty cool, huh?

Looking back at all of these significant events of the last 17 years culminating in this Republican give-away, I realize this is probably the closest thing to real magic that I will see in my lifetime.  

But as you might suspect, this was ALL simply too good to be true.

At the time of the vote, the Joint Committee on Taxation estimated the new tax bill would cost about $1.1 trillion over a decade. That was bad enough on its own, but now, four months later, a Congressional Budget Office estimate released Tuesday showed the bill will add $1.9 trillion to deficits over a decade.

After hearing this, the man that cast the deciding vote on the tax reduction, retiring U.S. Sen. Bob Corker, R-Tenn., said at a Senate Budget Committee hearing on the new CBO estimate, “If it ends up costing what has been laid out here, it could well be one of the worst votes I’ve made,”

“None of us have covered ourselves in glory. This Congress and this administration likely will go down as one of the most fiscally irresponsible administrations and congresses that we’ve had,” Corker said.

Business Insider also reported that the new CBO estimate also showed the U.S. will now reach an annual budget deficit of more than $1 trillion beginning 2019.

I am on record as railing against the Republican Tax Cut before it happened (See posts #72, #73 and #74), so while this won't help my children deal with the overhang from this decision over their lifetime, at least I will be able to look myself in the mirror in the morning and take comfort that my head was still screwed on straight.  Republican leadership who, in the words of Republican Bob Corker will be viewed as one of the most fiscally irresponsible that we’ve ever had, will look in the mirror every morning and simply remember, that they screwed us.

We are all shareholders in America.  We all have an equity stake in it and we want to see it grow and prosper. And despite the differences in our politics, our beliefs and our religions, we are joined together at the hip.  When our country does well, the benefits accrue down to us all, as it’s shareholders.  When our country hits some rough patches, even those created by the poor or even stupid decisions of our management, we can’t simply walk away from it, as much as we might like.  We must all suck it up and contribute to make our corporation strong again.  We must all pay our fair share. 

And that means that those of us who have more, must pay more.  That’s the way it works in Corporate America.  Someone just needs to explain that to the Republicans.