I am anticipating with dread the next Presidential election, always an opportunity for excessive delusional thinking and hyperbolic claims. On the other hand, perhaps I will be rescued from the coming insanity by an aneurysm which will take me away to my eternal reward. Then again, thinking on how I have led my life to date, perhaps I can endure a bit of political nonsense just a bit longer. My personal afterlife may leave something to be desired.

What I fear most is the mind-numbingly stupid debate we will endure on why our fiscal house is in disorder. It is mind-numbing in that the script is so old, the Republican talking points were first written down on papyrus paper or, as some have claimed, were chiseled in hieroglyphics on stone tablets. Our conservative bretheren will pound away on excess spending. ‘‘We have to cut our public budget, run our government like the family budget.‘ they will say repeatedly. ‘You pay your bills on time, that’s what real Americans do despite all the taxes the typcal family must fork over to a voracious spending machine known as Uncle Sam.‘ Of course, for them cutting spending does not include expenditures aimed at killing people. There must always be more money for weapons of destruction which is God’s will (NOTE: That bit about beating your swords into plowshares was a Biblical missprint). And by the way, your typical American family is in debt, with at least a mortgage or two, and possibly student loans and credit card debt and HELOCs. Private debt also runs into the trillions.

The Dems will retort with something about taxing the rich more to raise additional revenue. However, they never seem to push this theme with as much vigor as the other side when conservatives scream about bloated government, excessive spending, and general waste. My guess is that most Dems loathe saying anything that might scare off wealthy politcal donors, even those who realize they have been getting away with murder for years.

If you are as unfortunate as I am, you are getting scores of messages daily (even now with no immediate election) asking for donations from all sides of the political spectrum. Politics has become 98 percent about raising money these days and the other 2 percent about scaring the shit out of you. Reading these pleas is something out of the Twilight Zone. I don’t blck them all though, while irritating, many are entertaining (eg. Western civilization will collapse if you don’t send my $5 bucks by midnght for an election some 17 or 18 months away).

This morning, for some reason, my febrile mind wandered back three decades to the moment when Bill Clinton, during a brief Democratic trifecta, passed a budget Bill that (among other things) raised the top marginal tax rate from 31 percent to 39.6 percent. It was a brave act. His predecessor, George H. W. Bush had raised the top rate from 28 pervent to 31 percent, which cost him dearly among the Republican base and likely resulted in his losing the 1992 election. Americans have always hated paying for the public good, a disposition that goes back Colonial days (see my recent blog). Clinton’s move to improve our budgetary situation, along with the audacity to suggest we join the rest of the world in offering our citizens an expanded public health system, likely resulted in the success of the Gingrich revolution in the 1994 Congressional elections.

What I remember most about that year (I was in Washington at the time) is how desperately the Republicans howled that the ‘sky would fall’ if Clinton raised the the top tax rate. Unemployment would explode, productivity would crator, and our public debt would not decline but increase exponentially. There was no end to the horrible outcomes they laid before the American public. Their stand? If you want to reduce our debt, cut spending on anything and everything that benefits average and lower-income folk. But for heaven sakes, don’t tamper with things like tax rates for the ‘producers’ in society, or write-offs for private jets and three-martini lunches. Those things lubricate our economy and keep us growing. Does all this strike anyone else as transparently self-serving?

In any case, reality turned out quite different from the nightmarish scenarios described by the ‘right.’ The economy boomed during Clinton’s administration. The stock market soared. And most amazingly, annual deficits fell and, mirabili dictu, we ran budget surpluses, something not seen since the 60s. A colleague of mine at UW had spent time at Treasury around this time. He and his economist colleagues were stunned at how quickly annual deficts fell. They were in disbelief when budget surpluses were generated several years ahead of even their more optimistic projections. Soon, the hard right moved on to other issues. Obviously with fiscal armageddon delayed, could the culture wars be substituted as the au courant national nightmare. The damn liberal are attacking Christmas. (What!)

All this got me thinking about fiscal basics or budget essentials 101. In the last fiscal year, the feds collected about $5 trillion in revenues, or some $15,000 per person. A little more than half came from income taxes, about 30 percent from payroll taxes, and the rest from corporate and sales taxes along from custom duties. On the other hand, they spent some $6.5 trillion. Most of that went to big ticket items like Social Security, Defense, Health care financing, debt servicing, and distribution of recources to the States, things that are hard to cut. All other government programs and operations represent a pretty small portion of the budget.

The gap between revenue and spending is the annual deficit, $1.5 trillion in the last fiscal year. The deficits, when considered over time, constitute the aggregate public debt. That has grown to $31 trillion at the current time, a fact that led to the recent kerfuffle about raising the debt limit. Of course, the old stone tablets on which Republican talking points are to be found were dragged out one more time. The conservatives threatened national insolvency unless spending on working folks and lower income families were slashed. In truth, you would have to end virtually all such programs to achieve budget neutral figures. Cooler heads prevailed (this time), but the issue has not disappeared, not by a long shot.

What is worrisome is that our public debt has risen from about a one-quarter of our GDP (Gross Domestic Product) in late 1970s (at the onset of the Reagan revolution) to just about 100 percent of GDP today. Those are figures that even alarm a socialist like myself. Sure, we owe most of this money to ourselves but perhaps 25 to 30 percent is owned by foreign countries. What if they were all to call in what we owe them, like if we defaulted on our debts?

We had seen our national debt fall for decades after World War II, when a world conflict generated spending had pushed what we owed to 106 percent of our GDP in 1946 (remember war bonds). Many feared a post war economic collapse but government was then guided by Keynesian principles and remained in the hands of Democrats and rather liberal Republicans (Eisenhower would be considered leftist today and Nixon said ‘we are all Keynesians now.’ Throughout this period, the top marginal tax rates remained high (70 to 91 percent). Also, we invested in things like national health (e.g., Medicare and Medicaid), and in our infrastructure (the National Highway Bill), and education (the G.I. Bill and post-Sputnick investments in science.) All the while, the middle class boomed, inequality and poverty fell, and opportunity abounded (even for a schmuck like me). I do not exaggerate when I say that if a no- talent like me could make it, anyone can … you just need the right opportunity set.

Then we had the great U-turn in 1980. I’ve talked elsewhere about how progress against poverty then stalled and how inequality began to increase in virtually tectonic terms. But let us keep our focus on the debt issue. The public debt, which had fallen to about one-quarter of GDP in the 1970s, started rising again. Reagan slashed the top marginal rate from 70 percent to 28 percent along with other tax breaks for the wealthy, all under the dubious theory of supply side economics. At the same time, the darling of the right was not very good at slashing spending. He raised the defense budget dramatically. Then, when his budget director, John Stockman, tried to get his boss to indicate which programs should be slashed or eliminated, he found Ronald to be a softy. When faced with cutting help to struggling folk, Reagan could not do it despite his tough rhetoric. Out exploding debt was off and running.

Still, by the end of the Clinton administration, Bill had whittled the debt down to about $10 trillion. He both cut spending and increased revenue, raising the top rate to 39.6 percent as mentioned above. So, how did the aggrregate rate jump from $10 trillion to over $30 trillion in a couple of decades or so? For one thing, the Republicans regained their mo-jo about catering to the uber wealthy. To make a long strory manageable, Bush (the junior) enacted major tax cuts that slashed revenues (from what they would have been). At the same time, he initiated a series of costly wars and then, through negligence, permitted the housing crash to occur in 2008, a disaster which came close to cratering the global economy.

Obama managed to drag us back to prosperity but with considerable, though necessary, spending. Trump, however, then followed with more tax cuts in 2017 that greatly favored the wealthy and helped redistribute more of the economic pie to the top. That, coupled with the pandemic, and its consequences on both revenues and spending, pushed our deficits (and debt) into the stratosphere. Yet, when the debt ceiling kerfuffle erupted, the call from the right came directly from the ancient papyrus script … too much Democratic spending. And while the Republicans called for a general reduction in non-defense discretionary spending (not a big portion of the pie to begin with), they were surprisingly mute about specific cuts. They would let Biden make those choices and take the blame of course. Nice try!

To get real for a moment, anyone living on planet earth knows that deficits (and then debt) result from two factors … spending AND debt. Ideally, you would deal with both. By the way, you would not do well in my policy class if you could not figure this one out, a common sense and not an ideologocal fact. Clinton did this very thing in the nineties and Biden has started to do the same recently (NOTE: our current deficits are falling measurably at the current moment). Dealing with things ONLY on the spending side is unbalanced and counterproductive.

Now consider this, there is no evidence that we are an overtaxed nation, as the right continuously asserts. A study of 38 nations in the OECD (generally the better run countries) has the U.S. ranked 32nd out of the 38 in tax burden. Oddly enough, countries like Denmark and Finland, those often at the very top of global hedonic scales measuring the happiness of citizens, also are at the top of the tax-burden scale. They tax way more than us BUT also provide services that their citizens value and which significanty reduce the anxieties that plague Americans in their more winner-take-all culture.

Here’s the thing. At the end of the day, the tax cuts introduced over the past two-plus decades account for the preponderance of the debt growth since the turn of the century. Reasonable analyses suggest that some 57 percent of the additional debt over this period is due to the Bush (Jr.) and Trump tax cuts. However, when you factor out the temporary blips associated with the 2008 crash and the Pandemic, the poportion of the blame on our recent tax cuts (and revenue losses) jump to about 90 percent. Those two factors surely added much to short-term deficits but nothiing to longer term trajectories. The bottom line, our way back to fiscal sanity is through returning our tax burden to past levels and in line with our peer nations. If we do, the sky will not fall. If past history s any guide, we will do very well indeed (assuming we deal with other small challenges like climate change).

Now boys and girls, there was a time when some sanity prevailed in our governing institutions. There was a time when sound analysis and research played a role in policy making. No, I’m not making that up. I was alive during those times. And Republicans even made sense. They were the ones cautioning us on the behalf of fiscal prudence. They even struck me a sensible and I have been known to vote for a few over the years, though not recently. Not many. mind you, but there were some really good ones.

Sigh, they are gone now. Hopefully, their replacements will not drag us into the abyss. I’m not hopeful though, unless someone surrepticiously adds a common sense drug into their kool-aide. As I keep saying. I’m damn glad I’m old.