Editor’s note: This commentary is by Rick Detwiler, of North Ferrisburgh, who is a retired school superintendent and co-author of International Trustees Handbook, a reference source for governance of American international schools abroad.
[I] was listening to NPR the other day. They were interviewing Jason Furman, a Harvard economist, about the U.S. debt. That debt … our debt … has just passed the $22 trillion mark, an accumulation of annual federal deficits over the years. Furman reassured us that it really is not a problem, echoing CNBC’s assessment that it’s “a big scary number that really doesn’t pose much of a danger now.” Furman goes on to calm us: “I don’t think there’s a very big economic cost in deficit.”
Say what?
That interview pushed me to “do a google” and pull out my calculator. Here’s the math: $22 trillion debt means each of us (I’m talking about we 328 million U.S. residents) owes about $67,000. Interest due on that $22 trillion for this year alone is $390 billion — a mere $1,200 per U.S. citizen.
I’m no economist, but simple math tells me that I (and my wife — we file a joint return) am about to send $1,200 to Washington to pay just this year’s interest on our national debt. Worse, with a 2019 federal budget in which expenses ($4.4 billion) exceed revenue ($3.4 billion), I’m going to have to pay even more interest on a larger debt next year.
Not a “very big economic cost in deficit?” he says? I dispute that.
Furman goes on to cite an interesting chain of logic behind his point: “What deficits are is a drain on savings. But right now, there’s a lot of savings coming from all over the world. Businesses aren’t investing as much as they used to because a lot more businesses are digital. And as a result, interest rates are a lot lower, and the problems that deficits cause for interest rates are much less serious than they were a couple decades ago.”
So, the deficit is somehow not a problem now because interest rates are low? And savings are “coming from all over the world?” Just how does that square with the Federal Reserve Board’s report that “40 percent [of Americans] still say they cannot cover a $400 emergency expense.” Perhaps economic theory might be masking the harsh reality of common folk.
Few of us “common folk” would run our household budget or our small business finances, or vote as a shareholder of a corporation to manage money the way this administration does. Between tax cuts for the wealthy, government shutdowns, national emergencies for bogus reasons, and a blithely unaware recognition of the impact of these fiscal policies on the average American, this administration is driving us down the road to ruin.
Would that our president, legislators and economists like Furman pause, take out that checkbook, and put pen to hand writing that $1,200 check, as we all do, figuratively. Maybe sensibility would return.
