That’s where we find ourselves. The U.S. is at peace and despite President Trump’s claims, there’s no national emergency. And yet we’ve only seen debt as a higher share of GDP during the years of 1945, 1946, 2020 and 2021. Then, Republicans and Democrats knew to scale back. Now, debt explodes during emergencies and continues to grow in peacetime.

In 1946, after World War II, debt-to-GDP was 106%. It declined to just 25% by 1980, not only because of inflation and economic growth but because of real fiscal discipline. With budgets nearly balanced, the fruits of a booming private sector could actually reduce the burden. Beginning in the Reagan era, discipline gave way to a new normal of chronic budget deficits.

Three forces made the shift possible:

First, and the main cause of the mess we are in, is that the entitlement state became enormous, yet untouchable. The Social Security reforms of 1983 are a rare example of bipartisan structural reform of a major entitlement program in U.S. history. Since then, despite economic and societal changes, the program has never been reformed. Never mind that it faces insolvency and the potential for automatic benefit cuts of more than 20% in 2033. The same is true of our other major debt driver: Medicare. And Medicaid is growing far beyond its original intent.

Democrats, occasionally helped by Republicans, have worked to expand welfare programs meant for lower-income people to those in higher and higher income brackets. The most recent and extreme example is the COVID-era expansion of the Obamacare tax credit to wealthier taxpayers, a significant share of whom enjoy early retirement. The fight over its continuation is what the government shutdown is about.

Second, Republicans discovered that promising tax cuts without offsetting spending cuts was politically painless so long as one claims that they “pay for themselves.” There is one rare and recent exception: this year’s “One Big Beautiful Bill,” which included $1.5 trillion in spending reductions over 10 years to offset some of the tax cuts. It’s not enough, but it’s something. Meanwhile, the Democrats love to claim that debt wouldn’t be a problem if the rich paid their “fair share.” They already do pay an enormous amount in taxes. But the numbers still don’t add up.

Finally, the Federal Reserve, starting under Chairman Alan Greenspan in 1987, learned how to anesthetize the political pain of budget deficits by keeping interest rates artificially low and monetizing debt. Politicians concluded that they could borrow endlessly without suffering political consequences. The problem is that this only works insofar as investors don’t worry that they will be paid back with inflated dollars.

That illusion has vanished. Interest costs have surged from $372 billion annually just a few years ago to nearly $1 trillion today, surpassing what we spend on defense or Medicaid. Within a decade, yearly interest payments are projected to nearly double, reaching $1.8 trillion. Even without new programs, the built-in deficit would keep rising and outpace economic growth. And Washington keeps adding more deficit spending.

This decade’s bipartisan binge has debt on track for 166% of GDP by 2054. I don’t think we will actually reach that point, because inflation will break out and stabilize the debt. That would destabilize the country and inflict enormous amounts of pain and lost purchasing power. So, my point remains: Politicians on the left and right see that the debt is exploding and are doing nothing.

The current politics of this crisis are as bipartisan as its origins. Democrats defend every entitlement and dream up new benefits. Republicans demand more defense spending and still more tax cuts. Both claim that faster growth will somehow erase the arithmetic, but growth alone can’t close a structural gap this large.

Even sustained 3% real annual growth — a questionable assumption given the implications of an aging population and crackdown on immigration — would produce about $4.4 trillion in extra revenue over a decade, while total deficits will total $21.7 trillion.

Don’t be fooled: The debt explosion is not driven by waste, fraud or foreign aid. Nor is it the result of a lack of revenue. It’s the direct result of reckless promises to retirees, the cost of healthcare and an unwillingness to pay the bills honestly. For most of American history, debt fell when wars ended and peace returned. Since 1980, we’ve managed the opposite: peace without prudence and prosperity without restraint.

The post The three forces fueling America’s 45-year debt addiction appeared first on The Hemet & San Jacinto Chronicle.

It will take at least a year to transition to a tidier government because meeting notification requirements, amending and canceling contracts, working with unions and RIF requirements, planning to consolidate infrastructure, and disposing of excess property will all take time.

The annual federal budget sets the priorities, size, functions, and cost of the government for the fiscal year. Agencies have a deadline to submit their budget proposal to the White House. The White House proposal then goes to the House for consideration. Individual members propose hundreds of amendments, mostly to meet campaign promises to their constituencies. After passage through Congress, the budget is signed into law.

The government is huge and very costly, but it serves a few mandated purposes. Let’s review:

Congress’s specific tasks to enact laws to accomplish the above are enumerated in the Constitution in Article 1, Section 8. They boil down to managing the government’s money and commerce, establishing courts, defining crimes and punishing violations, defending the nation, establishing the Post Office and roads, granting patents and copyrights, and overseeing the District of Columbia and federal facilities.

Inherently governmental activities are defined in law at 48 CFR § 7.503(c) and expand on the above tasks. They include conducting criminal investigations and prosecutions; commanding military forces; conducting foreign relations; determining agency policy, regulations, and program priorities for budget requests; managing federal employees; controlling intelligence operations; procuring goods and services for federal use, managing contracts, and disposing of property; approving agency responses to Freedom of Information Act requests; approving federal licensing actions and inspections; and responding to federal audits.

Basically, the overall work of the Departments of the Treasury, Defense, State, Commerce, and Justice; all intelligence agencies; the Office of Personnel Management; General Services Administration; and the Office of Management and Budget are established priorities, as are the work of Congress and the federal judiciary.

The rest of the Cabinet and the independent agencies seem to have been established solely to expand governmental assistance and control. They do little besides increase the costly regulatory burden on the productive class and rain cash on problems without solving them.

At this point, a multipath approach is needed, starting with across-the-board measures.

Get rid of the baddies. If the federal cyber corps were to do an unannounced overnight purge of all federal devices (computers, laptops, smartphones, etc.) for porn, then thousands of pink slips could be handed out the next day. Do not replace that number of employees. I’m sure Elon could help write the necessary algorithm.

Halt stupid policies in their tracks. Abolish anything that remotely smacks of DEI. Halt all payments related to gender transition. There is no climate crisis. Stop all “green/sustainability” regulations and abolish all attendant projects. For example, $29.3 billion of Energy’s $51 billion FY-2025 budget request is identified for “climate.”

Halt enforcement of all agency-promulgated regulations across all agencies that cannot be directly tied to specific legislative language. Halt all support for illegal activities, including any funding going to illegal migrants or those supporting their movement to and dwelling in the US. Stop all federal activities that promote discrimination, such as grant and contract set-asides for certain genders, races, communities, etc. Get rid of the Jones Act, The Davis-Bacon Act, and any other legislation that increases the cost of federal activities for no benefit.

Retain only competent hires. The government only employs adults. Those adults get trained annually on cybersecurity, prohibited workplace practices, ethics, etc. This training should take place one time, upon employment, with the new hire promising to abide by all the rules for the duration of their employment upon penalty of immediate termination.

Cut federal research grants. Fund only half the cost of staff, equipment, supplies, and services for a research project. If an outside organization can’t find independent funding to cover the other half, plus infrastructure and travel, then there is no need to pursue a proposed avenue of research.

Cut essential agencies down to the quick. Ask the mid- and lower-level managers where the fat is and where nonessential or duplicative work is being funded. They’ll tell you far sooner than those wanting to control an empire.

Ask the hard questions. Is there a need for mail delivery at home? Why should all citizens pay for any local public transportation or for Amtrak when it mostly only serves the NE? Why do welfare payments cover food for a family, yet we still pay for school lunches for the poor?

Start all other agencies at zero. We’re not talking about saving money here; we’re talking about justifying any federal presence and expenses. Why is an agency, commission, or board needed at the federal level? Is there any federal requirement that the states can’t accomplish with their own funds? Is there any need for the Department of Education or the EPA? Why can’t most agencies or their overseas offices be subsumed into the State Department (e.g., USAID, Peace Corps, Commerce, and Agriculture)? Why is Veterans Affairs not part of Defense? Why is Homeland Security not part of Justice? Why isn’t the US Trade Representative part of Commerce? Chop off the few top layers and just incorporate the work they do. Is there any justification for PBS?

It’s 2024. Do we still need federal intervention in farming? Housing? Labor? With less going to the federal government, the people would have a much greater voice in how their tax dollars are spent and ensure that the greatest benefit is to local needs.

Abolish federal student loan guarantees; if individuals or universities are responsible for funding higher education, you can bet the cost will go down and success will go up.

Stop passing money through the federal government. It raises the cost of a project by at least 40% for overhead of collecting, managing, and distributing the funding. So, the $1,200 you received during the SARS-CoV19 scare cost about $1,680 in tax money (yours and your children’s, plus interest).

I like good governance and don’t mind paying for it. However, many see the government as both Mommy and Santa Claus. But it’s not. Letting the government run wild for “the greater good” is a very bad idea.

Some universally applicable regulations and attendant costs make sense. Enforcing minimum workplace, transportation, food, drug, and environmental safety standards are generally good ideas. Spending nearly $60 million of everyone’s taxbucks on a 25-mile stretch of highway to enhance habitat for the Olympic mudminnow was not.

By the midterms, half of Trump’s appointees should have worked themselves out of a job.

The post Yes, We Can Shrink The Size And Cost Of Government appeared first on The Hemet & San Jacinto Chronicle.