Rural Routes/Margot Ford McMillen

Debt Ceiling Still Needs to be Dealt With

OK. We’ve gotten through another Debt Ceiling Crisis. And now we have months—years, maybe—before worrying about spending again. Media can return to Trump, War, Migration and Guns. Right?

Wrong. The time to worry about national debt is now and forever. Until it’s manageable and there are good tax policies in place. Just like we’d do at home. Even though it’s unpleasant to think about, we need to get the deficit under control.

While our national debt isn’t exactly like your family obligations, there are similarities and it’s ridiculous that debt ceiling anxiety is a periodic drama that ends, always, in allowing more debt. Or cutting necessary programs that Americans depend on. Rarely do we take the opportunity to think about how to level the US fiscal playing field, income-wise.

For the super-rich, playing the tax-evasion game is, as one fellow put it, a “habit.” They set up their businesses to take advantage of loopholes, putting a headquarter in a low-tax or no-tax place, shipping their wholesale products to that place and paying the wholesale bills at a low cost, raising the price for consumers when they ship products out, without paying a tax on the difference. Even though taxes pay for infrastructure that everyone uses—shipping ports, highways, communications, schools, hospitals and so forth—if you avoid the tax, you avoid your share of the cost.

Tax avoidance has raised our national deficit to $32 trillion, or $95,000 per person. You can look at the National Debt Clock on-line to see the exact numbers. And, when we borrow and pay interest on that debt, who do we borrow from? When Americans buy US Treasury bonds, Americans get the principle and interest. Right now, foreign governments (mostly China and Japan) own about 24% of it. China’s buying less, maybe because of current tensions.

Some of our university economists argue that the debt ceiling is a made-up number. Since government spending creates productivity, they say, debt is a good thing. It drives the factories that build military equipment, creating jobs. It pays for farmers to raise crops, creating jobs. It pays for universities to do research, creating jobs. All of these things, the economists will argue, add to our national well-being. So, they say, debt doesn’t matter.

These economists have forgotten that the point of factories and farms is to make money in the marketplace. They are supposed to make enough to pay taxes, not the other way around. And taxpayers should support universities so that universities can do research that benefits citizens. But the tax system has been strangled. Today’s university research is mostly funded by corporations.

At this point, I was going to write that we need to pay off that debt but because we are Americans who carry debt throughout our lives, we know we will never pay it off. At our deaths, it will pass on to our kids like a shabby used car with a loan. And here’s another thing: Americans are falling behind on their personal debts. Credit card delinquencies are running at 4.5% now, 3.04% a year ago. The uptick is matched by delinquencies in car payments and mortgage defaults. And those debts, initiated in the last few years, are financed at the lowest interest rates ever. Today’s borrowers face higher interest rates.

The major similarity between national spending and family spending is this: unpredictable interest rates. That detail is completely out of our control. In my own lifetime, I’ve seen interest at 3% and interest at 12%. Debt is debt. We may carry it forever, and we’ll be paying interest on it forever. And some experts say interest will rise to a point that half our payments are interest paid out, with no principal being paid to bring the debt down.

How would we handle this at home? If Sweet-Ums comes home with a new-car brochure and a no-interest-for-a-year agreement from the dealer, what does the Cautious One do?

Answers are simple: You’d pull out pay stubs and examine your family income. You’d look at the heap in the driveway and decide if it has another year in it. You’d look at the no-interest agreement and see how the dealer makes up for it in the future. You’d pull out the bank statement and see what family fixed costs—rent, utilities, school costs, food—are running. If all those things check out, you’d examine the benefits—lower car maintenance, better fuel efficiency, that kind of thing.

Before you agreed, you’d remind Sweet-Ums that “we’re all in this together” and if the car comes home and finances don’t work out, you’ll both take equal responsibility for the disaster. Because rule one in any relationship is, “We’re going to make mistakes and we will forgive each other. And we’ll solve the problem.”

Government: same same. It’s time to solve the problem, and we know what the solutions are.

Margot Ford McMillen farms near Fulton, Mo., and co-hosts “Farm and Fiddle” on sustainable ag issues on KOPN 89.5 FM in Columbia, Mo. Her latest book is “The Golden Lane: How Missouri Women Gained the Vote and Changed History.” Email: margotmcmillen@gmail.com.

From The Progressive Populist, July 1-15, 2023

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