Teaching Government
Look, I was a government teacher for decades. I know how confusing the American government systems can be. After all, we have three levels of government; local, state, and federal. And we have three branches of government at each of those levels; legislative, executive, and judicial. With all of those permutations of government, it’s no wonder kids have a tough time keeping everything straight.
That’s not talking about the parts that aren’t even in English: from habeas corpus to ex post facto. Then there’s those weird, almost spooky references; to a “bill of attainder” or “corruption of blood”. And there’s the President of the Senate whose not the President of the United States but the Vice President, unless, of course, the Vice President isn’t there, then it’s the President Pro Tempore, — whew!!
But when a person IS the President of the United States (not of the Senate and, unfortunately, not Pro Tempore) a fundamental requirement should be to understand the “terms of art” of the government. A President is responsible for the entire government. He has, as Teddy Roosevelt put it, “the Bully Pulpit” to explain things to the Nation. So the President, one of only forty-five to hold the honor, should have it together. (*I know, he’s the 47th President, but he shares the “honor” of being both 45th and 47th. It’s just like Grover Cleveland was 22nd and 24th. We’ll get to that 23rd President in the middle here in just a few paragraphs).
Government Debt
So it was a surprise to me that Donald Trump doesn’t understand the governmental use of the term, deficit. And please, please, do not argue that “…he’s not a career politician, he’s a business man.” He’s in his second term as President, and, judging from his business practices including six bankruptcies, he ought to have a clear idea of what a deficit is.
The United States Government spends more money than it brings in. It can do that, by selling bonds, essentially by borrowing money and then paying it back with interest. Each year that the government runs a “deficit” (spends more than it brings in) it adds to the National Debt. Add decades of deficit spending, and we, The People of the United States, end up with a colossal debt. It’s about $36 Trillion right now.
How do we fix that debt? Well, as the old saying goes, if you want to get out of a hole, STOP DIGGING. The US government continues to spend more than it brings in, this year, $1.9 Trillion more.
Interesting Interest
The second question is, what impact does the debt have on our government? Like my Mastercard, every year the government “carries” the debt, they have to pay interest on it. There is a famous “debt clock” posted online by the US Treasury. It runs like a high speed fan, the figures ticking away at almost unreadable speed. The US gets a great rate on the debt, financed at only 3.37% (as compared to my Mastercard, at 17.24%). But multiply 36 trillion by .0337, and the annual interest to be paid on the debt is $1.2 Trillion.
Lots of big numbers – but here’s the deal. The total US Budget in 2025 is around $7 Trillion, so 17% of the budget is going to maintain the debt. It’s not buying Abrams Tanks or F-35 Fighters, and it’s not curing cancer or protecting Yosemite National Park. It’s not even supporting Elon Musk’s SpaceX. And it’s not paying the debt down. The Government is just maintaining the total debt – which of course is still increasing every year.
Trade Deficits
That’s the government deficit and debt. And that has little to do with the “trade deficit”, one of the issues that President Trump is trying to “fix” with all of these tariffs. A trade deficit is NOT a government deficit, even though President Trump seems to be confused between the two. A trade deficit is simple: people in the United States buy more stuff from China (in terms of dollars) then China buys from us. It’s not the US (or the Chinese) government directly, it’s the businesses and consumers in the two countries that create the “sales”.
Trump is trying to change that trade deficit by putting higher taxes on imported Chinese goods. The theory is, that Americans will stop buying as much Chinese stuff if it costs more. And, in the meantime, if they don’t, the extra money the US folks pay for the tax, the tariff, will go into the government coffers. So, maybe, that might be used to reduce the US Government deficit, just like all taxes on the American people do.
But to say, as President Trump did on Monday, that we have a “deficit with China that’s killing us, and we need to lower the deficit so we don’t have to pay so much interest”, is conflating two very different things. A government deficit and a trade deficit are not the same. He got confused about that. If Joe Biden had done that, the world would be screaming about his senility. But, of course, Trump gets a pass.
Tariff Warning
Now what about the 23rd President, Ohio’s own Benjamin Harrison? Like the current President, Harrison believed in the “powers of tariffs”. He invoked the “McKinley Tariffs” (named after Congressman William McKinley, also of Ohio, and a future President) which put a blanket 50% tariff on all imported goods.
Harrison didn’t put those tariffs on to raise revenue (taxes). What he wanted was Americans to buy American made goods, instead of imported goods. He wanted to support American industrialization in the 1880’s, the beginning of the age of factories. Americans were moving off of their farms and into the cities to take jobs “on the line”, making everything from candy bars to shoes to shirts to weapons. And for those factories to be successful, other Americans needed to buy those products.
Other industrial countries were able to make the same products cheaper. So in order to “level the field” (we’ve heard that used a lot recently) Harrison dumped the McKinley tariffs on them all. Leveling the field really meant, making Americans pay more for the goods they wanted, by raising the price of European goods. And the government “took” the difference in revenue, tax money. Buy foreign or buy American, to the average “Joe”, costs went up.
Rhyming the Past
The stock market gradually fell by 22%. That would be equal to a 9000 point drop in the Dow Jones Industrial Average today – it’s only down 4000 so far. And in political terms, it cost Harrison both the Congress and ultimately, the Presidency. The 22nd President Grover Cleveland (of New York) came back to win a second term in 1892. Regular folks back then, just like now, realized that protective tariffs ending up costing them more.
I don’t think Joe Biden is coming back in 2028. I hope that we still have a Democratic Republic where the vote of the people can make a difference, both in the Congressional election of 2026 and in 2028. But I do know something that Donald Trump doesn’t, and now, so do you. A government deficit isn’t a trade deficit, and, as Mark Twain said, “History doesn’t repeat itself, but it often rhymes”.
