I had a conversation with a Congressional candidate and I brought up Keynesian Economics and Keynes’ book, entitled « How to Pay for the War. » The entire gist of Keynes’ book is that it is alright for nations to float loans in times of heavy economic demand if they pay the loans off afterwards. In America, we gave up balanced budgets again and again. Now, with twenty one and one half trillion dollars of debt, the United States is not in a position to pay off its debt. It will take years. During his 1992 presidential bid, Paul Tsongas warned against the difficulty of paying off one trillion dollars in debt. Both Bush and Obama did not soften the impact of poor debt repayment by paying much money against the debt. Well, Obama tried but could not fix the situation. Bush did not even try. Neither did his father. I admire the Bushes, but I have to agree that they did not try.
Clinton tried, and succeeded but largely through dipping into Social Security money. No President has actively attempted to pay off the enormous debt by making the firm and necessary motions to pay back the debt. We are becoming a third rate country, especially with Trump. Mr. Trump does not seem to believe in anything resembling paying off the debt. I doubt that he has any idea how hard it is going to be just to pay off the trillion and one half dollars that he passed as a stop-gap measure for supposed middle class tax cut(s). We did not get tax cuts, we got a tax increase of a trillion and one half dollars. Whether there will be a tax response showing individual billionaires willing to do what Patriot’s owner Robert Kraft supposedly promised, by expanding his wealthy empire with a new paper mill because of the trillion and one half debt incentive, is going to take some time to process. If others take their large gift and use it as a business incentive, then possibly Trump’s gamble will have worked. Only time will tell. I have not seen too many people willing to part with billions of dollars when it has been given at the largesse of the public. I do not expect that they will either.
In his book, « The Imperious Economy, » David Calleo says that President Jimmy Carter expected to cut the federal budget by 12.2% in fiscal 1977, and 7% in fiscal 1978, while I paid 16.6% interest on my home in Lowell, Massachusetts. Financiers keep trying to push federal cuts to the budgets as long as forty or more years ago. Jimmy Carter’s cuts would not have done much for my bottom line given the high interest home loan I had to pay on, and pay off. He called for a balanced budget a number of times but he also increased the fee paid by balancing the budget by raising Social Security taxes on the expenditure.
France and Germany of that day realized that « the United States could not end its deficits abruptly without great disruption. » (Pg. 53) If that was true in 1978, it certainly is true now. We cannot end our deficits of 21 1/2 trillion dollars « without great disruption. » The current president has said that he will build a wall and « make Mexico pay for it. » (LTC Coverage of 2014 election). Mexico at no time has indicated that it would pay for a wall to hem in the United States of America and Mexico. That has forced the president to state that someone will build the wall, but he apparently does not know who. His predecessor, William Jefferson Clinton, also used Social Security to balance the budget. Social Security is a program which is paid for by its constituents, it is not a federal tax.
The presidential candidate « …must deal with the whole structure of leadership in a state, just as a President must do in dealing with a foreign nation. » (The Embattled Presidency) In short, the average President is thrown under the wheels of the cart while he or she tries to determine what his or her parameters are in America. That type of reflection has not hindered the current holder of the office. He does not seem to mind being thrown under the cart.
I often ask my Republican friends how they can make this president into a good man when he exhibits so many anti-Republican tendencies. They commonly, but not always say that he is a product of a divided party, and that he is not a Republican but a Progressive, in the oldest sense of the word. I think that this may underscore his vulnerability. He is the wrong man living in the wrong time. He needs to be disposed of and some other man or woman take his place. He has served his purpose, that being the remaking of a white citizen. Whites, and I am one, seem to think that they are closer to God, closer to the American dream, and closer to the Constitution than others. It is up to the rest of us to decide if that is true.
We are a nation that prides itself on its inherent superiority. Winston Churchill thanked President Truman for his saving of democracy. Of course, that took a group or maybe millions of people to accomplish that but credit was given to Truman. Truman once said that it takes forty years to get a fair appraisal of one’s presidency. He then proceeded to live those forty years with his wife in Missouri. He then wrote about his accomplishments at great length. His presidency was deemed a success, maybe not so much now as at the end of the forty years. He was quite a man, and his longetivity was incredible. He lived the end of his life without Secret Service protection.
People would visit his house and steal pieces of the structure of the house, like pieces of his clapboarding, which he always instructed his employees to rebuild at his expense.
In all fairness to history, Truman probably eclipsed Franklin Delano Roosevelt in accomplishments while in the Presidency. While FDR oversaw the building of the first atomic bomb, Truman used it to stop the war with Japan. While FDR stated that things had to change in our relations with minorities, Truman passed legislation doing just that. He integrated the armed forces. He was apparently more conscious of discrepancies in the treatment of Black servicemen than FDR was. He was a unique man, who used part of his time in the White House living at the Blair House while the termite-infested White House was rebuilt into the magnificient fortress that it is today.
Getting back to John Maynard Keynes, he did not see the world as being in constant debt with one another. « The figure which we have taken ..for the increased expenditure of the Government is 1,850 million pounds, of which 150 million pounds could be taken out of accruing depreciation not made good at home and 350 million pounds from assets and borrowing abroad before allowing anything for noble saving. » In other words, spend the money that is necessary, even though it seems disingenuous, because the war had to be paid for, no matter how much seemed to be tied up in debt.
He asks if the rich can pay for the war. He finds that that is not a logical conclusion. The rich want to stay rich. That is what we are finding in today’s trillion and one half trillion « Middle class tax cut. » As I stated, the rich want to stay rich. We have a credit card approach to our current deficit. We just pay more and more against the debt, especially the interest. We do not seem to be very interested in how high that interest becomes. Like a credit card.
So that is where we are. We are literally between the proverbial « rock and a hard place. » We can no longer say we are involved in Keynesian Economics. We are far beyond that, and the only reason some of our lenders have not called on us to pay our debt is because they realize that calling in the debt would bankrupt the premier economic engine in the world. We will have to pay it eventually. Right now, we cannot afford it. For many years I have been arguing that we raise the tariff. A couple of days ago, President Trump called for the same idea to be practiced. Also, one of the biggest mistakes we have made is to ignore our debt. I hope we have enough time to fix it. My younger brother calls the United States a « third world country. » He bases his stand on the fact that so much of our labor is unused. He thinks that our trade deficit is partially because of NAFTA, and I partially agree with him. NAFTA was an ill-conceived notion. It needs to be renegotiated. American car companies hardly build in America today. Some of those plants are going to the cheaper labor in Mexico. Millionaires need to be held accountable for their business decisions. If that happens we might be getting somewhere. Time will tell.