From a reader of my blog: Jack is the voice almost in the wilderness trying to warn us that we are deficit spending and borrowing ourselves into being Greece or even, eventually, Venezuela. He is a principled politician, almost an oxymoron today. I could go out and max out my three credit cards, around $24,000, on a big lavish trip somewhere. But I know better, because my credit would be shot and I would go bankrupt and end up living like a pauper. Maxing out our credit is what we are doing as a nation and there are severe consequences for that kind of irresponsibility.
I am a candidate in the May 15 Nebraska Republican Primary for U.S. Senate because the incumbent, Deb Fischer, is ignoring our enormous and out-of-control national debt. In fact, she has voted twice recently to make it much worse than it already is.
The question I am often asked is: “I agree with you about the debt and deficit spending but how do I know that you’ll be any better than all the other people who go to Washington and end up joining the establishment instead of opposing it, once they get there?”
Here is my answer:
I am a non-ideological fiscal conservative and have been writing about the debt and related issues consistently for several years on my blog “It Does Not Add Up.”
I am also a social moderate who is willing to take stands at odds with Republican orthodoxy such as endorsing a ban on the purchase of assault weapons as being the most effective way of curtailing mass shootings.
I am a retired UNO math professor and am not looking for a new career. If elected, I would focus on deficit and debt reduction from my first day on the job. It is unlikely that I would run for a second six year term.
Conclusion. I am confident that I will do what I say but how do I persuade the voters that I have the courage of my convictions?
I am a candidate in the May 15 Nebraska Republican Primary for the U.S. Senate because the incumbent, Deb Fischer, is ignoring our enormous and out-of-control national debt. In fact she recently voted twice to make it worse.
The new tax law, in spite of its good individual features, increases our debt by $1 trillion over the next ten years, even after new growth is taken into account. The new budget agreement increases spending by hundreds of billions of dollars. Fischer voted for both of these measures.
The Hoover Institution analyst, John Cogan, summarizes our dire fiscal situation in the above chart which compares three major categories of federal spending since 1950: defense, entitlements and all other. Entitlement spending is steadily increasing. The other two categories have stabilized at about 3.5% of GDP each.
The Manhattan Institute scholar, Brian Riedl, explains why this situation is so serious that it is already an emergency:
Between 2008 and 2030, 74 million baby boomers, will retire into Social Security and Medicare, at the rate of 10,000 per day.
Today’s typical couple has paid $140,000 into Medicare and will receive $420,000 in benefits, largely because physician and drug benefits are not prefunded with payroll taxes (only hospitalization is). Social Security recipients also come out way ahead.
The imbalance is so large that something has to give. Doubling the top tax rates of 35% and 37% to 70% and 74% (I.e. taxing the rich) would only cover 1/5 of the long term shortfall in revenue. An increase in inflation (purposeful or not) will not dilute away our debt. Social Security and Medicare benefits are also tied to inflation. Faster inflation would also increase interest rates and therefore interest payments on our rapidly growing debt.
Restructuring cannot wait. Every year of delay sees 4 million more baby boomers retire and get locked into benefits which will be difficult to alter. “Reality will soon fall like an anvil on Generation X and Millennials as they find themselves on the wrong side of the largest generational wealth transfer in world history.”
Conclusion. A severe form of fiscal cancer is gradually creeping over the body politic. We ignore it at our grave peril.
I am a candidate in the May 15 Nebraska Republican Primary for U.S. Senate. The incumbent Deb Fischer is running for reelection. She is a nice lady and represents Nebraska well in many respects. For example she is on the Senate Agricultural Committee which is important to the Nebraska economy.
But there is one major way in which Fischer is falling down on the job. She is ignoring our enormous and out-of-control national debt. In fact she has voted twice recently to make the debt even worse than it already is. The new tax law increases debt by $1 trillion over the next ten years even after new growth is taken into account. The new budget deal could add an additional $2 trillion to the debt over the next decade. Fischer voted for both of these items. I want to emphasize as strongly as possible that this is why I am challenging her in the Republican Primary.
Of course, I have positions on other issues. For example, I have recently endorsed a ban on assault weapons. But for me there is a huge difference between fiscal and social issues:
Our national debt, now 77% of GDP (for the public part on which we pay interest) is projected to reach 109% of GDP in just 10 years and to keep increasing way beyond that. As interest rates rise to more normal historical levels, interest payments on the debt will increase by hundreds of billions of dollars per year. This will almost surely lead to a severe fiscal crisis in the relatively near future, causing huge damage to our economy, unless we make major changes in current policy.
Social issues are much different. They will eventually get resolved through the normal political process. Mass shootings in the U.S., for example, are intolerable to an overwhelming majority of Americans. If the NRA continues to oppose sensible changes in gun regulations, then many of its Republican supporters will eventually be replaced by Democrats who will enact the needed changes.
Conclusion. Our rapidly growing national debt will lead fairly soon to an existential crisis if left unattended to. The problem of mass shootings (as an example of a festering social problem) will be resolved by normal political processes.
Most of my readers know that I am a candidate in the May 15 Nebraska Republican Primary for the U.S. Senate, against the incumbent Deb Fischer because she is ignoring our enormous and out-of-control national debt. In fact she has recently voted twice, for the new tax law and new budget, to increase our annual deficits by hundreds of billions of dollars per year.
The only way to “fix the debt” is to begin shrinking our annual deficits. She is moving us in exactly the wrong direction that we need to go.
My last two posts, here and here, explain why our debt is so scary: we risk losing our status as the world’s leading economic power and, furthermore, a new crisis could occur much sooner than many people expect.
Unfortunately for the future of our economy, the new tax law is gaining support amongst the American population, with approval having now reached 50% and disapproval having sunk to 45%. Yes, the new tax law will increase economic growth in the next two years before the extra stimulus fades away. But the additional debt will greatly hurt our economy in the long run.
Conclusion. The national Republican leadership has sold the American people a bill of goods. At a time when economic growth is already picking up speed, the Republican Congress has stepped on the gas to yield an additional short term stimulus at the great risk of long term harm. This is highly irresponsible a endangers the Republican Party’s reputation for fiscal responsibility.
I am a candidate in the May 15 Nebraska Republican Primary for the U.S. Senate because the incumbent, Deb Fischer, is doing nothing about our enormous and out-of-control national debt. In fact, she has recently voted twice, for the new tax law and budget, to make our debt even worse than it already was. My last post quotes a reader of my blog as saying that deficit hawks need to make our soaring debt sound scary to ordinary citizens who don’t understand how it will affect their own lives.
The analyst Desmond Lachman from the American Enterprise Institute makes it sound even scarier by predicting a new 2008-2009 style crisis within the next year. According to Mr. Lachman there are two basic reasons to fear another full-blown global economic crisis soon:
First, we have in place all the ingredients for such a crisis. The housing price bubble before the 2008-2009 crisis has been replaced by a global asset price bubble, for both stocks and bonds. A second key ingredient is that the global debt-to-GDP level is significantly higher than in 2008.
Second, due to major mistakes by the Federal Reserve and the U.S. Administration, the U.S. economy is in danger of soon overheating, which will bring inflation in its wake. With very low unemployment, the Fed has let low interest rates linger for too long. And the U.S. economy has now received a double fiscal stimulus with unfunded tax cuts and a new two-year spending boost.
The Federal Reserve now has two unattractive choices. It can raise interest rates quickly and burst the global asset bubble, or it can proceed at a slower pace and ignore the very serious inflation risk.
Conclusion. With a very high and rapidly growing national debt, along with unusually low interest rates which will be pushed up soon one way or another, we should prepare ourselves for another crisis in the near future.
Deficit hawks need to make the national debt seem like something scary that will personally affect people. As of now, most Americans find it boring and unrelatable because they don’t perceptibly feel its effects in their daily lives. How does it affect the John Q. Public GOP voter who is not so keen on immigrants, has a mortgage, loves the military, and despises abortion until his daughter gets knocked up in her mid-teens? John Q. Public doesn’t fully grasp that an out of control debt will cause the market to raise interest rates unilaterally leading to serious inflation in USD terms.
This will clearly dislodge the USD as the world’s reserve currency, opening the door for either the Chinese Yuan or Bitcoin to become the world’s new reserve currency. So, when the US debt bubble bursts, John Q. Public will basically be working in a factory for the equivalent of 6000 current USD per year, and I don’t think John Q. Public grasps this reality. Maybe John will croak before this comes to pass, but John Q. Public II will pay the price toiling away here in the heartland to make iGadgets for the Chinese middle class.
I am a candidate in the May 15 Nebraska Republican Primary for U.S. Senate because the incumbent, Deb Fischer, is doing nothing to reduce our enormous and out-of-control national debt. In fact she is consistently voting to make it worse! My challenge is to convince enough voters that our debt really is an extremely serious problem.
Conclusion. Eventually our huge and rapidly growing debt will catch up with us and we will have a fiscal crisis much worse than the Financial Crisis of 2008. We don’t know when this will happen but the longer we ignore the problem, the more inevitable it becomes that it will end up very painfully.
I have been a Republican for most of my adult life because I have usually considered the Republicans to be the party of fiscal responsibility. But is this still true? Consider:
Our national debt now stands at 77% of GDP (for the public part on which we pay interest) and was already predicted to reach 98% of GDP in 2027, just ten years from now. Now, with the new tax law and the new budget deal, deficits are likely to reach 109% of GDP by 2027.
In numerical terms, our current $20.5 trillion debt was already set to increase by $11 trillion over the next ten years. The new tax law will add $1 trillion to the debt (after taking new growth into account). The new budget deal adds another $1.7 trillion. In other words new debt, on top of our existing debt, will be close to $14 trillion over the next decade.
The Republican Party now controls the Presidency and both houses of Congress and therefore has absolutely no excuse for such fiscal extravagance.
I am a candidate in the Nebraska Republican Primary for U.S. Senate against the incumbent, Deb Fischer, because she is offering no resistance to this flagrantly rotten charade. Last fall, it would have taken only three Senators to stop the trillion dollar giveaway in the new tax law and not one single Republican Senator voted against it.
Conclusion. The Republican Party is now endangering its critical role in making sure that the federal government acts in a fiscally responsible manner. I shudder to think what will happen to our country without a major party offering fiscal restraint.