Everybody’s Fault
The government of the United States of America might be controlled by Republicans or Democrats, liberals or conservatives, internationalists or populists. But one thing is the same. No matter who controls the Presidency and the Congress, or even when the power was split: almost everyone spends more money than the government brings in.
OK, not ALWAYS. Eisenhower balanced three budgets in his term, and Nixon balanced the budget in 1969. Bill Clinton balanced it for four years, from 1998 to 2001. And before the Great Depression, 1933, there were balanced budgets most of the time. But in the “modern era”, since the New Deal, the Government has consistently run a deficit. The few exceptions just highlight the reality. Over nearly a century, eighty-two annual budgets exceeded income.
Unlike the “several states”, there is no law requiring Congress (or the President) to balance the budget. Before the “modern era”, Federal deficit spending was reserved for times of crisis: the Civil War and World War I. But the Great Depression, followed by World War II, made deficit spending a kind of “regular thing”. The Cold War continued that trend, with Ronald Reagan intentionally out-spending the Soviet Union on defense in order to break their economy. It worked, but left the US nearly $3 trillion in debt, three times more than when his Presidency began.
A Clock
Let’s take a moment to explain the terminology. A deficit is simple: this year the US government will spend $6.8 trillion, and bring in $4.9 trillion. That’s a $1.9 trillion deficit (makes Reagan look like a spendthrift). Add all of the annual deficits together, along with the few years when the US Government ran a surplus, and that’s the total debt: what the US Government has spent more than it brought in. The “butcher’s bill” is now around $36.9 trillion. You can see a running total on the US Debt Clock.
(By the way, there’s a “DOGE Clock” on the “Debt Clock”. It claims that DOGE saved the Government almost $500 billion. But all the non-DOGE audits show that Mr. Musk’s “wunder-kind” actually saved about $150 million, while spending around $120 million. Sure, $30 million is “real” money. It’s about the cost of one of the two Navy fighters that rolled off USS Harry Truman and into the Red Sea last month. But it doesn’t make much of a real dent in the deficit or the debt).
Why is the clock running? Because, just like my credit card bill, the money in debt is “borrowed” in one way or another. And like any borrowed money, the borrower is charging interest against the debt. So, just like the monthly credit card bill, it’s constantly growing, even if the government isn’t spending more on something else at the moment.
Economics 101
In case you missed it, the 2025 US Government is ten times more indebted than the it was thirty-five years ago. Part of that amazing expansion is mitigated by the “value of the dollar”. What cost $1 in 1990, now costs $2.47 today (Inflation Calculator). The dollar is worth, in purchasing power, about 40% of what it used to be.
But it’s all tied together. The value of the money, what a dollar can purchase, is mostly determined by the amount of money in circulation. It’s “Economics 101”, supply and demand. If there is more money in supply, and the amount of goods to be purchased is relatively stable, than those goods will cost more. The “good purchased” didn’t change, but the value of the dollar to buy it went down. We call that inflation. And since the “supply of money” is increased by the tools the Government uses to finance the debt, then we can say that the money supply is increased by $36.9 trillion and growing. That’s the amount of the debt.
Tools
What are the “tools”? The US Treasury issues government bonds, a loan, a very safe investment for the public (and other Nations). They are “safe”, because “everyone” trusts that the US Government will ultimately pay off those bonds, with interest, without fail. And when those bonds (loans) come due – the Treasury sells more bonds to pay off the old ones. 80% of those bonds are owned by the public, both in the US and by foreign investors. 20% is owned by other parts of the US Government (US Debt).
It’s kind of like using a credit card to pay off another credit card. Sure, Mastercard is clear, but now Discover is a lot bigger. And the interest keeps adding up. Last year, the US Government spent $1 trillion, or about 15% of the annual budget, for interest payments on the debt.
Big, Beautiful Bill
So what about the “Big, Beautiful Bill” (BBB) just passed by the US House of Representatives? Well, the BBB cuts a lot of US spending, particularly on Medicaid and the SNAP (food stamp) programs: $1 trillion. And it saves more money by cutting Student Loan and Clean Energy benefits. And it also cuts a lot of taxes, particularly to the wealthy (CNBC). The Congressional Budget Office, a non-partisan part of the Government, scores the BBB as adding $2.7 trillion to the debt in the next ten years.
But part of that “scoring” was based on the Government income from the Trump Tariffs. As the courts are now asserting that those tariffs are Unconstitutional, the BBB might add much more to the total debt, as much as $10 trillion in the next decade. In his first term, Trump added $7.8 trillion to the National Debt. In contrast, Obama added $9 trillion (in two terms), and Biden added $4.7 trillion. As already noted, almost everyone knows how to spend money.
So what’s the worry? Well, first of all, the government will continue to spend more and more just to “service” the debt. That’s money not going to education, or healthcare, or even fighter jets rolling into the sea. And second, the increased debt continues to reduce the value of the dollar. That’s fine, as long as incomes continue to go up, a “break-even” deal. But for those on fixed incomes, pensions and the like, increased prices means decreased quality of life. And for those dependent on government help, Medicaid and Medicare, they will face a double whammy: higher prices, and less help.
That’s America’s problem, no matter what your political “flavor”.
