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 The housing price bubble before the 2008-2009 crisis has been replaced by a global asset price bubble, for both stocks and bonds.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.
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 is doing much worse than just ignoring it; she is actively making it much worse. For example:
Fischer voted for the new tax law which increases our debt by $1 trillion over ten years even after new growth is taken into account. The main features of the new law are excellent but need offsets to avoid losing tax revenue.
The budget just approved by Congress and signed by President Trump, for this year and next, will increase the debt by $300 billion. It means that the deficit for FY 2018 will be $800 billion followed by $1.2 trillion for FY 2019 (see first chart). In FY 2027, just ten years away, the annual deficit is projected to increase to $2.1 trillion (see second chart).
On Senator Fischer’s watch, for the six Fiscal Years 2014 – 2019, the new debt is likely going to be $4.5 trillion (just add up the totals for these years in the chart above). This means that by the end of her six year term in office, 20% of our entire debt of $22.5 trillion, will have been accumulated while she was in office!
Conclusion. The national debt now $20.5 trillion and growing rapidly, is by far our biggest long term problem. We badly need representatives in Congress who will stop ignoring this awful problem and start doing something about it. That is why I am a candidate for the U.S. Senate.
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.
The cost of employer-provided healthcare is going through the roof, now averaging $26,944 for a family of four
Medicare beneficiaries are now spending 44% of their average Social Security income on healthcare spending.
Yesterday we learned that three corporate behemoths: Amazon, Berkshire Hathaway and JPMorgan Chase will form an independent healthcare company to try to hold down healthcare costs for their combined one million employees in the U.S.
And last night, President Donald Trump, in his generally well-received State of the Union Address, failed to mention our nation’s biggest problem by far: our surging national debt.
And moreover, it is precisely the public cost of healthcare which is driving our debt.
Our country could soon be overwhelmed by a trifecta of huge costs:
The cost of healthcare for individual company employees and also for retirees.
The cost of healthcare subsidies paid by the federal government.
Our rapidly growing and badly out-of-control national debt.
Conclusion. Is it not exceedingly clear that our two polarized political parties must stop spending their time bickering about less important problems and come together to address our huge debt problem and the very high cost of healthcare which is driving it?
Just a few days ago I announced my candidacy in the Republican Primary for U.S. Senate against the incumbent Deb Fischer who is doing nothing to reduce our badly out-of-control national debt and, in fact, just voted to increase it by $1 trillion over the next decade.
It is the high cost of government spending for Medicare, Medicaid and the tax exemption for employer-provided care which is the main driver of federal debt.
But healthcare is also getting very, very expensive for American workers and retirees as well. In my last post, I reported that:
A family of four paid $26,944 for healthcare expenses last year which was 44% of median family income of $59,039.
In 2013 a Medicare beneficiaries’ average out-of-pocket healthcare spending was 41% of their average per capita Social Security income. This will rise to 50% in 2030.
Conclusion. American healthcare is expensive for workers, retirees and taxpayers. In other words, it is expensive all the way around, for everybody. There isn’t a lot of slack left to give way. The cost of healthcare will impoverish our whole country if we can’t get it under control. Stay tuned for proposed solution.