The Federal Deficit for 2017

October 21, 2017

Don’t know whether this is a coincidence or the universe saying “Boo” to frighten anyone who cares about America’s fiscal health, but right on the verge of Halloween, it was announced that the federal deficit for 2017 will be $666 billion. Appropriate, if you think runaway debt is sending our kids’ futures to Hell in a hand basket. And the next budget, which will include needed infrastructure rebuilding, disaster relief and tax cuts, is expected to send it even higher.

To those who would respond that this means we need to raise taxes instead of lower them: you might have a point, if this were a one-time expense. But the fact that we’ve amassed so much debt leaves us no other alternative than to try to stimulate the economy to grow our way out of it. Many years of spending like money is going out of style have left us too deep in the hole ever to haul ourselves out by tinkering around the edges.


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Governors whose states don’t have the easy out of piling up debt year after year sometimes have to raise taxes to get past a crisis, as I had to do in Arkansas (and I took a shellacking from so-called conservatives over it, as if saddling your grandkids with your own bills were a conservative principle.) In Arkansas, we faced a constitutional ban on borrowing money, court-ordered spending increases, and a budget that was going almost entirely to schools, medical care for the poor and prisons (or as I called it, “education, medication and incarceration.”) There was no fat to cut and no way to borrow, so we had to raise taxes temporarily. But I blocked attempts to keep them in place and got rid of them as soon as the budget crisis was past.

In Washington, any attempt even to scale back the rate of growth is greeted with hysterical claims that millions will die if the feds spend slightly less “more money” than planned. But the current proposed budget will spend $4.1 trillion. You can't tell me with a straight face that there’s no fat in there anywhere.

If nobody’s willing to take a scalpel to the federal budget, can we at least stick a liposuction needle into it?

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Comments 1-6 of 6

  • Marty Juergensen

    10/24/2017 12:38 PM

    Hello,
    Just a quick note that I really appreciated David Smiths comments dated from 10/21 regarding our national debt, deficit spending and the Federal Reserve Quantitative Easing / theft of middle America. History will certainly be interesting judge for this period for what we have done to future generations in America. Thanks for all you do!

  • Richard Weet

    10/22/2017 09:04 AM

    It needs to be Trump, Huckabee, and Rand Pual. Working together to try and save this Country from a financial disaster. That team could really get the best results done from anyone else. I think they should work together on everything.

  • Marcus Turner

    10/22/2017 08:02 AM

    Mike,

    Iris and I caught your new TV show last evening. Brother, it was great to see you in your element again. You got us thinking, how awesome it would be to sit in your show some time. We will explore that possible venture. Nashville isn't quite in Raleigh's back door, but it would make for a nice weekend get-away!
    Enjoying your newsletter, or web-site I should say. I appreciate your efforts. I have just loss all faith in the news media. Keeping up through sources one has confidence will tell it in a balanced and truthful nature, is so needed. We are all so inundated with skewed, at best, broadcasting and updates. I know I echo your feelings when I say, I dream of having this country God blessed us with back to being a true, God-fearing, God-loving, shining light on the hill again. I guess, truly the end-time that the prophecies of the scripture that teach us how it will be, is so much closer now. May God keep us that live for him first and trust he is in control. Eternity I hear is incredible. To see my son and family that I have tragically loss.........well, that's why they call it HEAVEN!
    Sorry, I got diverted. My comment today wasn't intended to stray there. However, I live everyday with the thoughts, memories, sadness, however assurance of the PROMISE.
    God Bless you Brother.......keep up the good work, and we will be watching.

    We love you,
    Marcus Turner - NC

  • Norman Poff

    10/21/2017 10:58 PM

    Current deficit=20Tr. At $1 million per day payment, interest free, $365Million per year, 2.7 yrs pay off 1st Billion, 2700 yrs pay off 1st trillion X 20T requiring 54,000 years to retire the debt. That is 9 X the 6,000yrs since Adam and Eve. This is never going away. That is more than 2000 generations.

  • David Smith

    10/21/2017 10:06 PM

    When money is spent it is for consumption or investment. Like a fire consumes and destroys its fuel, spending on consumption, while necessary, consumes and destroys wealth. Investing in a profitable business that generates wealth increases the nation’s wealth and living standard. When our country’s consumption exceeds profits from wealth generating ventures, our economy is contracting along with our living standard.
    Nearly all government spending is consumption. Increasing government spend gives the economy a short term kick, but at the expense of consuming the country’s wealth. After the stimulus has worn, the nation is left with less wealth to invest in profitable ventures so the economy slows and our break even consumption or living standard must contract. Politicians can’t stay in office with a contracting economy so they borrow more, increasing government spending, consuming more wealth., and living standard takes a hit again. Therefore, increasing government spending to fix our economy is a failing strategy.
    The Federal Reserve attempting to stimulate the economy lowered interest rates to near zero, or stated another way, they lowered the rent on wealth held in dollars. It is the middle income American that invests in dollar denominated assets, bonds, savings accounts, certificates of deposits etc. who loses out as his rent has been fixed below market rate. With little or no return, savings are discouraged, but it is reinvested savings that form the foundation of our capitalistic society, those wealth building ventures that enrich the nation. An unintended consequence of fixed interest rates is undermining our economy.
    In a further attempt to stimulate the economy, the Federal Reserve created trillions of dollars to buy government debt and mortgage backed securities, commonly called Quantitative Easing. Since the Fed cannot print wealth, the new dollars had no value as they were not earned with labor nor was anything sold in exchange. They obtained their value by stealing purchasing power from existing dollar holders, namely middle income Americans. Not only was rent fixed, but a portion of the wealth was confiscated without consent. The press and prominent officials will tout what good was done with the new money, but they will not address the opportunities lost as a result of confiscated wealth. One might argue assisting home buyers is at least in part wealth building, but enabling the federal government to spend more via purchasing their new and rolled over debt is shifting the balance of spend toward wealth consumption. In summary, QE is the elite and connected buying something for nothing or stealing from the American citizen.
    President Trump’s new tax reduction plan is admirable, but it is addressing a symptom, not the root cause of the country’s economic problem, namely we are consuming much more wealth than we are currently creating. Reducing taxes is a good starting point as more funds will end up with people who may invest at least a portion in wealth generating ventures, but the only path to sustained economic growth is shifting to more wealth creation than consumed. The single largest consumption component is the federal government and we cannot grow sustainably until we seriously contract government spend.

  • Susan McDonald

    10/21/2017 09:03 PM

    Love your new show on TBN
    Great show