In fiscal 2018 the interest that is paid on the debt increased by $62 billion to $371 billion/year. That represents an increase of 20%, and currently, 8 cents, up from 6.8 cents, of every budget dollar goes towards paying off that interest, and it continues to get worse. According to the Washington Post, interest costs are the fastest growing part of the federal budget and is beginning to grow exponentially. The deficit for fiscal 2018 was an estimated $782 billion, up from $666 billion in 2017, according to the CBO. Kevin Hassett, chairman of the White House's Council of Economic Advisers, this week said the White House will release plans on how to attack it according to Bloomberg (I’m not holding my breath). According to the Wall St, journal, Fiscal 2018 spending exploded by nearly 130 percent, but federal tax receipts rose just 0.4 percent. That's partly because of a 31 percent decline in corporate tax payments and other features included in last year's tax cut bill. There is something drastically wrong when a company like Amazon makes over $11 billion and profits, and not only doesn’t have to pay any taxes, but gets a $129 million rebate.
The cure for the aforementioned is obvious and are as follows:
• Term limits for Congress; I can’t see this happening in Congress unless all current members are grandfathered. The alternative would be a constitutional convention. This requires a positive vote by 2/3’s of the states. I am convinced that once a congressman/woman is elected, they will do anything to keep their position since it is unlikely they will ever get a better job. I feel very strongly that Congressmen/women vote to get re-elected, not for what is good for the economy.
• A balanced budget amendment; in good economic times, this is not a problem, however, during a recession, such as now, this tends to be countercyclical and worsen the effects of the recession. Keynes said that deficit spending is essential in a recession. What Congressmen/women, and the President, conveniently ignore is the 2nd part of the equation, pay off the deficit during good economic times. This must also be suspended in times of war.
• Cut spending, close tax loopholes and elect a president who will keep his promise of working towards a balanced budget. I thought it would be Trump and the Republicans. I was wrong