“Rush, what does Joe Biden need to do for you in order to get your vote?..”
It took the US Government approximately 205 years to accumulate its first trillion dollars of national debt. Today we spend nearly 1 trillion dollars annually on interest.
It took the US Government approximately 205 years to accumulate its first trillion dollars of national debt.
Today we spend nearly 1 trillion dollars annually on interest.
There are countless resources online that highlight the fiscal woes of our country. And while many are meant to sensationalize the debt burden for clicks, what’s more concerning to me – rather than the sheer amount of money owed – is the underlying pathology that reinforces how we got here and where we are likely headed in the future.
Recently I had coffee with a friend in Atlanta, and with 2024 being an election year the conversation ultimately turned political.
“Rush, what does Joe Biden need to do for you in order to get your vote?.. What if he eliminated student loans?” – Anonymous friend in ATL
When asked this question my inner business owner could only think of tax breaks as an incentive to influence my voting decision (lol).
But subsequently I began questioning whether my vote should be based on who will generate the most (financial) gain for me.
Thinking “what’s in it for me?” works broadly in a capitalistic sense as independent parties need to engage in mutually beneficial transactions for everything to work.
But at a political level this framework creates and supports a very myopic approach to fiscal policy (my opinion).
Spending since 2009
Obama Presidency 2009 – 2017: $8.2 trillion of spending
Trump Presidency 2017 – 2021: $9.1 trillion of spending*
Biden Presidency 2021 – Today: $4.8 trillion of spending*
*COVID related spending from 2020 – 2022 est $3.7 trillion*
On average (if you do not include COVID years) either party has been spending $4.6 trillion per presidential term, with most spending going towards entitlement programs (Social Security, Medicare, and Medicaid), our military, and interest payments.
Why is this important?
We are unlikely to cut back on entitlements since that would be incredibly unpopular (politically)… people want more free money not less.
We are unlikely to cut back on our military budget given the 2 conflicts occurring that indirectly impact the US.
We are unlikely to default on our interest payments since that would be catastrophic for the global financial system.
This all points to more money being spent (borrowed) to support these endeavors… and frankly we do not have it – today.
In 2024 the US budget deficit is 1.8 trillion dollars.
This means we spend $1.8 trillion more than what we generate in tax revenue.
In fact if we taxed 100% of every dollar earned in 2024, we would still owe $6.4 trillion.
Solutions?
We need to get efficient with our spending and earn our way out.
That would look like a presidential elect doing two things:
One, finding a way to cut back on entitlements/defense without making the country or elderly vulnerable (challenging yes… impossible no).
Two, being supportive of transformational business/technology that will generate leaps in GDP.
Returning to my earlier coffee conversation, I believe any candidate that’s supportive of these two initiatives would get my vote… even if either initiative did not benefit me in the short term.
Cheers, Rush