I am a candidate in the Nebraska Republican Primary for U.S. Senate against the incumbent Deb Fischer because she is ignoring out enormous and out-of-control national debt. In fact she has voted twice recently to make the debt much worse than it is already.
In my last post I made the case that debt is by far the biggest long term problem facing our country and that it will be a huge burden on future generations, starting with the millennials.
A new report from the Congressional Budget Office shows just how bad the problem really is:
To just stabilize our debt at the current level of 78% of GDP (for the public part on which we pay interest) will take a savings of at least $5.4 trillion over the next ten years. To achieve even this modest goal would require reducing annual deficits by roughly 50%.
To balance the budget by 2028 (allowing ten years to accomplish this) would take a savings of least $7 trillion over the next decade. This would mean reducing annual deficits by $700 billion per year on average, an extremely difficult task.
Such numbers as these show how frightfully serious our fiscal situation is. Our national leaders should be working hard to focus the country’s attention on this awful problem and how we are going to address it. Instead they won’t even come together to negotiate sensible annual budgets.
Conclusion. How will our debt problem be resolved? Will it take a new crisis to wake up the country to our extremely dire fiscal situation? I prefer to be optimistic and hope for sensible action to head off a new crisis. But there is absolutely no guarantee that common sense will prevail.
I am a young voter, that was not of age during the presidential election, so I am doing my research to make sure I help make a wise voting decision for our state. I understand that your main focus is the debt, and I have read up on your other issues as well, but I wanted to ask you what makes you stand out from the other candidates. I have concluded that democratic candidate Ms. Jane Raybould and you have very similar stances on issues. So, I guess my question would be what can you do for our state that other candidates haven’t brought up. I am looking forward to hearing back from you.
Here is my answer to a young, open-minded, first-time voter:
I am an unconventional candidate because I am a fiscal conservative and a social moderate, specifically:
The national debt, now 78% of GDP (for the public part on which we pay interest), is the highest since right after WWII, and is predicted by the Congressional Budget Office to keep getting steadily worse without major changes in current policy such as curtailing the growth of entitlement spending. This is by far the greatest long term problem facing our country. If we don’t address it, we will inevitably have a new and very severe fiscal crisis in the near future, as soon as interest rates return to normal (and higher) historical levels. Basically, we are in a deep hole, nonchalantly digging it deeper and deeper, when we need to devote all of our efforts to climbing out.
Social issues such as abortion policy, gun rights and immigration reform are highly contentious but do not fundamentally threaten our prosperous and stable way of life. I am confident that the political process will eventually achieve an acceptable resolution of these social issues. I am far less confident that normal politics will get us out of our debt bind.
Conclusion. What distinguishes me from all of the other candidates in this race, Democratic, Libertarian or Republican, is my strong insistence that we must focus on solving our out-of-control debt problem. Otherwise the future of our country is at great risk. Millennials will suffer most from inaction.
From a reader of my blog:
My biggest concern is your stand on the 2nd Amendment. Just about all of us here in Western Nebraska own firearms. There’s no way we’re gonna give them up. You need to change your position, my friend.
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 just recently voted twice to make the debt even worse than it already is. This is highly irresponsible because uncontrolled debt puts our peaceful and prosperous way of life at great risk.
Even though I am primarily focused on our debt problem, and how to solve it, there are other important issues in this congressional race and I have taken positions on many of them.
By far the most controversial position I have taken is to endorse a ban on the purchase of assault weapons. I have done so for the following reasons:
First of all, I strongly support the 2nd Amendment’s “right to keep and bear arms.”
The 2nd Amendment does allow some restrictions on guns. For example, guns are not allowed to be carried onto airplanes or into courtrooms.
We need to curtail mass shootings in the U.S. and I support the growing national momentum to get this done.
Stricter background checks on gun purchases and improved mental health treatment will help to some extent. But even with improvements along these lines, too many dangerous people will fall through the cracks and be able to acquire guns.
All mass shootings are carried out with semiautomatic assault weapons and so making them scarcer is the most effective action we can take to curtail them.
Conclusion. I am making an uphill effort to unseat an incumbent U.S. Senator because of my great concern about our horrendous national debt. But a candidate must take stands on many different issues and I am doing this. I am not a threat to the 2nd Amendment and I hope gun owners will be able to understand this.
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.
I am a candidate in the May 15 Nebraska Republican Primary for U.S. Senate. I have entered this contest because the incumbent, Deb Fischer, has done nothing to reduce our enormous and out-of-control national debt and, in fact, voted recently (with the new tax law) to increase our debt by $1 trillion over the next decade. And this is after new economic growth, stimulated by the tax changes, is taken into account.
One way to get the debt under control is with a more sensible budgeting process, but this is not enough by itself.
We also need a major effort to reduce the cost of healthcare. One problem here is that employer provided health insurance is very inefficient, especially because it insulates employees from the full price of their healthcare. The way to fix this is to make the employer mandate in the Affordable Care Act more flexible in the following ways:
Replace income based tax credits in the ACA with aged-based tax credits (which then apply to everyone). See here for details.
Allow individual employees to migrate away from the employer plan to individually underwritten personal insurance. This will often save money for the individual employee (and family), the employer (who has fewer employees to cover) and the government (which has a smaller tax exemption). The employees also gain more flexibility for future employment.
Such a system, when fully implemented, will save $400 billion per year in government revenue, both state and federal.
Conclusion. I have outlined one way of moving from the defined benefit healthcare system we have now to a defined contribution system which will save hundreds of billions of taxpayer dollars every year by putting more responsibility on the individual health consumer.
A Letter from Birmingham Jail Why we cannot wait Martin Luther King, Jr., April 16, 1963
Yesterday was Martin Luther King Day and every year at this time we are reminded of his eloquent letter from the Birmingham Jail, “Why we cannot wait,” written to some of his hesitant supporters in the Spring of 1963.
African-Americans were tired of waiting so long for equal rights in their own country. On my own personal scale, I am so frustrated by the inability of our political system to address our massive debt problem, that I am getting organized to enter the 2018 Nebraska Republican Senate Primary against the incumbent Deb Fischer who has just voted (with the new tax law) to increase our debt by $1 trillion over the next decade.
Basically I am saying that our debt is so large and growing so fast that it will soon be out of control if we don’t take action to start reducing it very soon.
The public debt (on which we pay interest) is now 77% of GDP, the highest since WWII, and projected by the Congressional Budget Office to keep getting steadily worse. It will grow by $11.5 trillion in just 10 years to almost 100% of GDP and will reach 150% of GDP, double the current level, by 2047, without major changes in current policy.
A fiscal crisis, much worse than the Financial Crisis of 2008, will occur long before 2047 if nothing is done to greatly shrink our annual deficits which are again rapidly approaching the trillion dollar per year level.
The new tax law increases deficits by an average of $100 billion per year, and therefore makes it that much harder to shrink them down substantially. It is imperative for the two parties, Democrats and Republicans, to work together to figure out how to do this.
Conclusion. Our national debt is so large and growing so fast that it is virtually out of control. We need prompt and fairly strong action to turn the situation around. I have often discussed one major way to do this.
Six years ago I was a candidate for the Republican nomination for Nebraska’s Second District Congressional seat. I lost in the May 2012 Primary. After the November 2012 national election I began writing this blog It Does Not Add Up focused on fiscal and economic issues, mainly our large and rapidly growing national debt. I have now been blogging on this issue for over five years and the debt problem is just getting worse and worse. Here is where we are right now:
All 52 Republican Senators voted for the new tax law which, in spite of its beneficial tax reforms, adds $1 trillion to our debt over the next decade (after growth is taken into account).
The Congressional Budget Office projects our debt to grow by $11.5 over the next ten years. In FY2019, just one year from now, CBO projects the deficit will exceed will exceed $1 trillion and equal 4.7% of GDP. By 2047 federal debt will reach 150% of GDP, almost double the current 77%.
In our polarized Congress, Republicans insist on increasing defense spending, Democrats insist on increasing domestic spending and trying to put any limits on entitlement spending is very difficult. Republicans are willing to cut taxes but there is little enthusiasm for raising them.
The present stalemate will eventually lead to a new fiscal crisis, much worse than the Financial Crisis of 2008, without major changes in current policy. The thought of having to drastically cut many different spending programs in the middle of a huge fiscal crisis is horrifying.
Are there any alternatives? Calling a Constitutional Convention for balancing the budget, establishing term limits and/or limiting Congressional power (Convention of States), have created much interest but are long shots which may never happen.
Conclusion. Somehow or other we need to light a fire under enough members of Congress to persuade them to take our rapidly accumulating debt very seriously. Let me know (email@example.com) if you are willing to work with me to do something along these lines!
Americans are a very fortunate people. We are protected by two oceans and friendly neighbors to our north and south. We are the strongest country in the world, both economically and militarily. We provide the world with cutting edge leadership in many areas such as technology, finance, energy production, scientific research and university education.
In short we live in a very successful, prosperous and complex society. We do have serious problems but they are being addressed by our elaborate legal and governmental processes and structures. Slowly but surely life in America is getting better and better all the time.
Given our country’s size, complexity and dominance in the world, it is inevitable that government will also grow in size and structure in order to take on new responsibilities. It is completely unrealistic to think that we can return to a more limited form of government that existed in the past.
When I say, then, that I’m a fiscal conservative, I am not advocating for less government but merely that we pay for the government that we have, in other words, act in a fiscally responsible manner.
And we are not doing this at the present time:
Our national debt, now 77% of GDP (for the public debt on which we pay interest), is the highest since right after WWII. It is predicted by the Congressional Budget Office that it will keep steadily getting worse without major changes in current policy.
The urgency of the debt problem is based on the fact that interest rates are now so low that it is almost “free” money. But interest rates will inevitably return to more normal historical levels and, when this happens, interest payments on the debt will skyrocket. Eventually this will lead to a Fiscal Crisis, much worse than the Financial Crisis of 2008.
The solution to this problem need not be drastic. Federal spending is growing by 5% per year while tax revenues are growing by 3% per year. If we would just hold spending increases down to 2.5% per year, the federal budget would be balanced in a few years and our debt would start shrinking as a percentage of GDP.
Conclusion. Spending restraint, with very few actual spending cuts, is all that it will take to put our debt problem on a path to solution. Surely we are capable of acting in a fiscally responsible manner like this!
As I frequently remind my readers I am a fiscal conservative and a social moderate. I usually write about particular economic and fiscal problems facing our country. But every now and then I like to step back and view our overall situation at one time. The last time I did this was here.
Let’s take another look:
The economy is puttering along at 2% annual growth with a relatively low unemployment rate of 4.3% and a good indication that faster growth, up to 2.5% annually, is right around the corner, see here and here. The economy, at least, is headed in the right direction.
Foreign policy. Long term our biggest problem is China, which has four times as many people as we do and is growing economically three times as fast. China will soon surpass us in both economic and military strength. Our best insurance for this inevitable day is to have lots of democratic friends around the world.
Global warming is real and getting worse. Our best strategy for dealing with it is a revenue neutral carbon tax, rather than depending on ad hoc regulations like the Clean Power Plan and ever increasing auto emission standards. If the U.S. demonstrates its seriousness with a carbon tax, it is likely that the U.S. and China (which is highly polluted) could work together to establish world-wide carbon emission standards.
National debt, currently 77% of GDP (for the public debt on which we pay interest), is predicted by the CBO to keep getting steadily worse (see chart) without major changes in current policy. Right now our approximately $14.3 trillion public debt is almost “free” money because interest rates are so low. But sooner or later interest rates will return to more normal levels and, when this happens, interest payments on the debt will rise by hundreds of billions of dollars per year. This will inevitably lead to a severe fiscal crisis, far worse than the Financial Crisis of 2008.
Conclusion. I am relatively optimistic that we can maintain good relations with China and will have the good sense to better control carbon emissions. But our debt problem is politically very difficult to address because it will require spending curtailments. How do we successfully address such a huge problem?
Most of the controversy generated by the healthcare bill passed by the House, and the one now being considered by the Senate, concerns the way Medicaid is funded. The current system whereby states are reimbursed by the federal government for a percentage (national average 53%) of their Medicaid expenses would be replaced by putting the federal contribution on a strict per-capita basis, indexed to the annual rate of inflation.
Medicaid is a vast program now serving 73 million low-income and disabled Americans and is doing a good job especially for the elderly and the disabled with special needs. But it costs the federal government nearly $400 billion per year and the cost is growing rapidly. It is essential to get open-ended Medicaid spending under much better control and one good way to do this is to put the federal contribution on a fixed budget.
The Congressional Budget Office has just issued its latest Budget and Economic Outlook report. It shows the ever-worsening fiscal condition for the U.S., unless current policy is changed.
The deficit for 2017 is predicted to be $693 billion or 3.6% of GDP.
Deficits will grow dramatically over the next decade with trillion dollar deficits returning by 2022.
Debt held by the public (on which interest is paid) will grow by $11.2 trillion between now and 2027, from $14.3 trillion today.
Spending will grow from 20.9 percent of GDP in 2016 to 23.6 percent in 2027, while revenues will rise from 17.8 percent in 2016 to 18.4 percent by 2027.
The vast majority of spending growth over the next decade (83%) is the result of rising costs for health care, Social Security, and interest on the debt.
Conclusion. The national debt is growing much too fast. The only way to turn this dangerous situation around is to reform all entitlement programs, including Medicaid, to get their costs under much better control.