I am a candidate for the U.S. Senate in the May 15 Republican Primary against the incumbent Deb Fischer because she is ignoring our enormous and out-of-control national debt. In fact she has voted twice recently to make our debt even worse than it already is. I am referring to both the new tax law which, in spite of its good individual features, raises our debt by $1 trillion over the next decade and also the 2018 budget agreement which increases the debt by a similar amount.
The nonpartisan Congressional Budget Office estimates that this year’s budget deficit will be over $800 billion and next year’s at $981 billion, almost back to the trillion dollar level seen for four years after the Great Recession.
The likewise nonpartisan think tank, the Committee for a Responsible Federal Budget, concludes that over half of next year’s huge deficit is the direct result of legislation passed since 2015 and signed by President’s Obama and Trump, as shown in the chart.
In more detail:
The largest contribution to next year’s deficit, $230 billion, is from the December 2017 tax bill.
The next largest contribution is $190 billion from the 2018 Bipartisan Budget Act.
But the 2015 doc fix and tax extender bills also add $100 billion to the 2019 deficit.
As CRFB says, “It is no longer enough for Congress to ‘do no harm’ in the near term and ensure solvency of entitlement programs over the long term. Fixing our debt will now require reversing the harm which has already been done with tax cuts and spending increases.”
Conclusion. Historically the Republicans have been the party of fiscal responsibility. But now the GOP is completely in charge and annual deficits are increasing rapidly. Is it not very clear that big changes are needed in who represents us in Washington?
I am a candidate in the May 15 Nebraska Republican Primary for U.S. Senate, against the incumbent Deb Fischer because she is totally ignoring our enormous and out-of-control national debt. In fact she has just recently voted twice to make it worse than it already is.
The major driver of our debt is the entitlement programs, Social Security, Medicare and Medicaid. Social Security is self-funded from the payroll tax and can be shored up long term with some relatively simple adjustments such as raising the income cap on which the payroll tax is levied and/or SLOWLY raising the eligibility age for full benefits. Medicaid costs can be controlled by block-granting it to the states with a fixed contribution from the federal government.
But Medicare will be much harder to reform because it is the most expensive entitlement program of all. The above chart shows that a couple with average wages reaching age 65 in 2015 can expect to receive Medicare benefits that exceed what they put in by $357,000. This subsidy will only increase in the years ahead.
The American Enterprise Institute’s James Capretta has recently described one possible way to get Medicare costs under control. In outline:
Combine hospitalization (Part A), outpatient services (Part B) and drugs (Part D) into a single combined insurance product.
Offer community-rated premiums for beneficiaries, meaning that premiums would not depend on age or health status.
A small, universal entitlement benefit would be paid to all enrollees set to cover about 20% of today’s benefit and equal to about $2600. The Medicare payroll tax of 2.9% would pay for this universal benefit.
Additional financial support would be based on lifetime earnings, with the lowest quartile receiving substantial additional support which would be phased out for middle- and upper-middle class retirees.
Retirees would purchase private insurance plans which could be in the form of high-deductible catastrophic insurance combined with health savings accounts.
Conclusion. “The reform of Medicare outlined above is a plan to substitute higher premiums from the middle and upper classes for the large general-fund subsidies taxpayers now provide to Medicare to finance the majority of Part B and Part D costs. The end goal is a self-financing Medicare program.”
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 the U.S. Senate against the incumbent Deb Fischer because she is ignoring our enormous and out-of-control national debt. In my last post I laid out the reasons why you should believe me when I say I will make fixing the debt my top priority.
So let’s assume that I replace Deb Fischer in the Senate. Then what will happen? Lots of things:
First of all, it will show that Nebraska voters understand how serious our debt problem is and are willing to support a candidate who can argue convincingly that we must fix it. Such an outcome in just one state will attract national attention and therefore greatly increase national awareness of the debt problem.
From day one in January 2019, I would start agitating with Democratic and Republican senators alike for action on the debt issue. Keep in mind that I am a non-ideological fiscal conservative. I am confident that many other senators understand the inherent magnitude of the debt problem and would respond in a positive manner to a bipartisan attempt to find a workable solution.
Any effective solution must involve entitlement reform which is a highly charged issue. In particular, it is the high cost of both public and private healthcare which is the main problem. Basically we need to move away from defined benefit healthcare towards defined contribution healthcare which would likely take the form of high deductible catastrophic care plus health savings accounts. Any widely acceptable plan would have to be universal (i.e. include everyone) and provide adequate subsidies so that everyone can afford it. Here is one possible way to do it.
Conclusion. Our debt problem is solvable but it will take a lot of dedicated effort by national leaders to actually get this done. The sooner we get started the easier it will be to move forward.
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.