Unraveling Our Soaring National Debt

By Darrell Berkheimer, As published in The Union

During the next few days, we will be inundated with reports about the squabbling in Congress over the national debt ceiling. Of course, Republicans will continue their demands to cut Social Security, Medicare and other economic programs while ignoring a record increase in debt that occurred during the four years of Donald Trump’s presidency.

Republicans also continue to ignore that both Social Security and Medicare are self-financed by payroll deductions. They need a reminder that Social Security benefits are based on a 35-year record of a worker’s average earnings and payments into the program.

But a rising concern over the national debt is well justified when we examine how it affects the federal budget. The 2023 budget included a 10% expense just to pay the interest on the national debt. But a September report stated it costs $879 billion to maintain the debt, which amounts to 14% of total federal spending.

Interest on the debt, plus nearly 40% for Social Security and Medicare are mandatory payments that account for 73% of the budget. Other mandatory expenses enacted by previous congressional legislation include additional health insurance, 5%; economic security programs, 8%, and benefits for veterans and federal retirees, 8%.

The remaining 27% is listed as discretionary expenses, which include 13% for defense. The other 14% goes to education, transportation, natural resources and agriculture, science and medical research, law enforcement, and miscellaneous others.

Because those figures are rounded, and may not total exactly 100%, they reveal that approximately half discretionary spending is for defense.

But let’s look at how national debt soared during the past 6 years.

At the beginning of the Trump Administration, the debt ceiling was $17.2 trillion. It had been that amount since February of 2014. But it had to be raised to $22 trillion in March of 2019. And another raise to $28.9 trillion – with carryover debt from the Trump Administration – was necessary during President Joe Biden’s first year.

The last raise – to $31.4 trillion – was on Dec. 16, 2021. And now, the national debt is nearing $33 trillion – after the latest estimate this past July put it at $32.47 trillion, and rising.

News services Pro Publica and The Bulwark cited U.S. Treasury Department data showing the debt rose a record of nearly $7.8 trillion during Trump’s 4-year term – a 33% increase.

Pro Publica reported it attributes that huge increase to a “combination of Trump’s 2017 tax cut and the lack of any serious spending restraint,” plus the “more than $3 trillion into Covid-19-related stimulus” packages.

Corporate tax cuts also were cited as the main reason for doubling the national debt between 1980 and 1990 when Ronald Reagan was president. Back then – when $100 would buy nearly as much as $300 today – the national debt went from $2.1 to $4.4 trillion.

Those tax cuts were a part of Reagan’s failed “trickle down economics,” which severely limited funds collected for Social Security – because the trickle didn’t go down much beyond the best-paid 6% of earners. They received 62% in additional income compared to only 17% that went to the other 94% of workers. (I provided a bit more detail about that situation in my Social Security commentary of 2 weeks ago.)

Before continuing with what’s needed to control our national debt, I want to digress again to note just how much $1 trillion is. At a recent weekly men’s group session, one fellow noted that spending $1 trillion at the rate of $1 million per day would take 27 years plus 4½ months.

So, to whom do we owe all of that nearly $33 trillion?

Nearly $7 trillion is owed to the Social Security fund through low-interest paying U.S. Treasuries, commonly referred to as T-bills or T-notes. The rest is owed to individuals, businesses, governments (local and state), who purchased various Treasury securities, plus foreign countries. Approximately one-third is owed to foreign nations, with Japan and China our two largest creditors.

And finally, let’s stop playing games with the debt ceiling and start altering the budgeting and spending habits to control the debt.

It will take a combination of more frugal defense spending and reducing corporate tax credits and loopholes to increase revenues. And if the Internal Revenue Service is provided with enough staff, it’s anticipated the annual revenue shortage can be eliminated.

To be more specific on defense spending, I must ask: Why do we need approximately 750 military bases in more than 80 countries?

Why do we need 119 bases in Germany; another 119 in Japan; 73 in South Korea, and 44 in Italy?

I know we need military bases; but why so many in the same country?

Those figures indicate entirely too much overlapping and redundancy – providing for an enormous waste.