{"id":7803,"date":"2025-04-08T09:32:50","date_gmt":"2025-04-08T13:32:50","guid":{"rendered":"https:\/\/dahlman.online\/?p=7803"},"modified":"2025-04-08T09:32:52","modified_gmt":"2025-04-08T13:32:52","slug":"deficits-and-deficits","status":"publish","type":"post","link":"https:\/\/dahlman.online\/index.php\/2025\/04\/08\/deficits-and-deficits\/","title":{"rendered":"Deficits and Deficits"},"content":{"rendered":"\n

Teaching Government<\/h3>\n\n\n\n

Look, I was a government teacher for decades.\u00a0\u00a0I know how confusing the American government systems can be.\u00a0\u00a0 After all, we have three levels of government; local, state, and federal.\u00a0\u00a0And we have three branches of government at each of those levels; legislative, executive, and judicial. With all of those permutations of government, it\u2019s no wonder kids have a tough time keeping everything straight.\u00a0\u00a0<\/p>\n\n\n\n

That\u2019s not talking about the parts that aren\u2019t even in English:\u00a0\u00a0from habeas corpus to ex post facto.\u00a0 \u00a0Then there\u2019s those weird, almost spooky references; to a \u201cbill of attainder\u201d or \u201ccorruption of blood\u201d.\u00a0\u00a0And there\u2019s the President of the Senate whose not the President of the United States but the Vice President, unless, of course, the Vice President isn\u2019t there, then it\u2019s the President Pro Tempore, — whew!!<\/p>\n\n\n\n

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 \u201cterms of art\u201d of the government. \u00a0\u00a0A President is responsible for the entire government. He has, as Teddy Roosevelt put it, \u201cthe Bully Pulpit\u201d to explain things to the Nation.\u00a0\u00a0So the President, one of only forty-five to hold the honor, should have it together. (*I know, he\u2019s the 47th<\/sup>\u00a0President, but he shares the \u201chonor\u201d of being both 45th<\/sup>\u00a0\u00a0and 47th<\/sup>. It’s just like Grover Cleveland was 22nd<\/sup>\u00a0and 24th<\/sup>.\u00a0\u00a0We\u2019ll get to that 23rd<\/sup>\u00a0President\u00a0\u00a0in the middle here in just a few paragraphs).<\/p>\n\n\n\n

Government Debt<\/h3>\n\n\n\n

So it was a surprise to me that Donald Trump doesn\u2019t understand the governmental use of the term, deficit.\u00a0 \u00a0And please, please, do not argue that \u201c\u2026he\u2019s not a career politician, he\u2019s a business man.\u201d\u00a0\u00a0He\u2019s 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.\u00a0\u00a0<\/p>\n\n\n\n

The United States Government spends more money than it brings in.\u00a0 \u00a0It can do that, by selling bonds, essentially by borrowing money and then paying it back with interest.\u00a0\u00a0Each year that the government runs a \u201cdeficit\u201d (spends more than it brings in) it adds to the National Debt.\u00a0\u00a0Add decades of deficit spending, and we, The People of the United States, end up with a colossal debt.\u00a0\u00a0It\u2019s about $36 Trillion right now.<\/p>\n\n\n\n

How do we fix that debt?\u00a0\u00a0Well, as the old saying goes, if you want to get out of a hole, STOP DIGGING.\u00a0 \u00a0The US government continues to spend more than it brings in, this year, $1.9 Trillion more.\u00a0\u00a0<\/p>\n\n\n\n

Interesting Interest<\/h3>\n\n\n\n

The second question is, what impact does the debt have on our government?\u00a0\u00a0Like my Mastercard, every year the government \u201ccarries\u201d the debt, they have to pay interest on it.\u00a0 \u00a0There is a famous \u201cdebt clock<\/a>\u201d posted online by the US Treasury. It runs like a high speed fan, the figures ticking away at almost unreadable speed.\u00a0\u00a0The US gets a great rate on the debt, financed at only 3.37% (as compared to my Mastercard, at 17.24%).\u00a0\u00a0But multiply 36 trillion by .0337, and the annual interest to be paid on the debt is $1.2 Trillion.\u00a0\u00a0\u00a0<\/p>\n\n\n\n

Lots of big numbers \u2013 but here\u2019s the deal.\u00a0 \u00a0The total US Budget in 2025 is around $7 Trillion, so 17% of the budget is going to maintain the debt.\u00a0\u00a0It\u2019s not buying Abrams Tanks or F-35 Fighters, and it\u2019s not curing cancer or protecting Yosemite National Park.\u00a0\u00a0It\u2019s not even supporting Elon Musk\u2019s SpaceX.\u00a0\u00a0And it\u2019s not paying\u00a0\u00a0the debt down. The Government is just maintaining the total debt \u2013 which of course is still increasing every year.<\/p>\n\n\n\n

Trade Deficits<\/h3>\n\n\n\n

That\u2019s the government deficit and debt.\u00a0\u00a0 And that has little to do with the \u201ctrade deficit\u201d, one of the issues that President Trump is trying to \u201cfix\u201d with all of these tariffs.\u00a0\u00a0A trade deficit is NOT a government deficit, even though President Trump seems to be confused between the two.\u00a0\u00a0A trade deficit is simple:\u00a0\u00a0people in the United States buy more stuff from China (in terms of dollars) then China buys from us.\u00a0\u00a0It\u2019s not the US (or the Chinese) government directly, it\u2019s the businesses and consumers in the two countries that create the \u201csales\u201d.\u00a0\u00a0<\/p>\n\n\n\n

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\u2019t, 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.  <\/p>\n\n\n\n

But to say, as President Trump did on Monday, that we have a \u201cdeficit with China\u00a0\u00a0that\u2019s killing us, and we need to lower the deficit so we don\u2019t have to pay so much interest\u201d, is conflating two very different things.\u00a0\u00a0 A government deficit and a trade deficit are not the same.\u00a0\u00a0He got confused about that.\u00a0\u00a0If Joe Biden had done that, the world would be screaming about his senility.\u00a0\u00a0But, of course, Trump gets a pass.<\/p>\n\n\n\n

Tariff Warning<\/h3>\n\n\n\n

Now what about the 23rd<\/sup>\u00a0President, Ohio\u2019s own Benjamin Harrison?\u00a0 \u00a0Like the current President, Harrison believed in the \u201cpowers of tariffs\u201d.\u00a0\u00a0He invoked the \u201cMcKinley Tariffs\u201d (named after Congressman William McKinley, also of Ohio, and a future President) which put a blanket 50% tariff on all imported goods.\u00a0\u00a0<\/p>\n\n\n\n

Harrison didn\u2019t put those tariffs on to raise revenue (taxes).\u00a0 \u00a0What he wanted was Americans to buy American made goods, instead of imported goods.\u00a0\u00a0He wanted to support American industrialization in the 1880\u2019s, the beginning of the age of factories.\u00a0\u00a0Americans were moving off of their farms and into the cities to take jobs \u201con the line\u201d, making everything from candy bars to shoes to shirts to weapons.\u00a0\u00a0And for those factories to be successful, other Americans needed to buy those products.\u00a0\u00a0<\/p>\n\n\n\n

Other industrial countries were able to make the same products cheaper. So in order to \u201clevel the field\u201d (we\u2019ve heard that used a lot recently) Harrison dumped the McKinley tariffs on them all.\u00a0\u00a0Leveling the field really meant, making Americans pay more for the goods they wanted, by raising the price of European goods.\u00a0\u00a0And the government \u201ctook\u201d the difference in revenue, tax money.\u00a0\u00a0Buy foreign or buy American, to the average \u201cJoe\u201d, costs went up.<\/p>\n\n\n\n

Rhyming the Past<\/h3>\n\n\n\n

The stock market gradually fell by 22%. That would be equal to a 9000 point drop in the Dow Jones Industrial Average today \u2013 it\u2019s only down 4000 so far. \u00a0\u00a0And in political terms, it cost Harrison both the Congress and ultimately, the Presidency. The 22nd<\/sup>\u00a0President Grover Cleveland (of New York) came back to win a second term in 1892.\u00a0\u00a0Regular folks back then, just like now, realized that protective tariffs ending up costing them more.<\/p>\n\n\n\n

I don\u2019t think Joe Biden is coming back in 2028.\u00a0\u00a0I 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.\u00a0 \u00a0But I do know something that Donald Trump doesn\u2019t, and now, so do you.\u00a0\u00a0A government deficit isn\u2019t a trade deficit, and, as Mark Twain said,\u00a0\u00a0\u201cHistory doesn\u2019t repeat itself, but it often rhymes\u201d.<\/p>\n","protected":false},"excerpt":{"rendered":"

Teaching Government Look, I was a government teacher for decades.\u00a0\u00a0I know how confusing the American government systems can be.\u00a0\u00a0 After all, we have three levels of government; local, state, and federal.\u00a0\u00a0And we have three branches of government at each of those levels; legislative, executive, and judicial. With all of those permutations of government, it\u2019s no … Continue reading “Deficits and Deficits”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","om_disable_all_campaigns":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[1],"tags":[],"class_list":["post-7803","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"yoast_head":"\nDeficits and Deficits : Our America - Essays on Politics and American Life<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/dahlman.online\/index.php\/2025\/04\/08\/deficits-and-deficits\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Deficits and Deficits : Our America - Essays on Politics and American Life\" \/>\n<meta property=\"og:description\" content=\"Teaching Government Look, I was a government teacher for decades.\u00a0\u00a0I know how confusing the American government systems can be.\u00a0\u00a0 After all, we have three levels of government; local, state, and federal.\u00a0\u00a0And we have three branches of government at each of those levels; legislative, executive, and judicial. 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After forty years of teaching and coaching track and cross country, I've finally retired!!! 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