As a retiree one of things I do is keep up with current events. Today and for the last three years the predominant event has been to get rid of our President, Donald Trump through what ever means possible. Most recently I have seen Facebook posts that claim he is responsible for our National Debt and should be removed for his financial incompetence.
Of the comments focusing on National Debt, one said you don’t cut taxes until the debt is paid off. This comment sounds upside down to me. It is like asking my employer to give me a raise because I’m spending too much money to pay my bills. When money was tight for me, I controlled spending. Another said Trump promised to eliminate the National Debt in 8 years. Our debt is clearly a problem but how can Trump, or any president reduce this debt in such a short time?
Let’s look at some data and see what makes sense. The table below shows revenue and spending for the last five years. This range was selected because it encompasses two presidents. Here are some key highlights from this data.
- Personal income tax is about 50% of revenue regardless of high taxes or low taxes. Something to do with high employment, maybe?
- Payroll tax (Social Security, Medicare) remains at about 35%.
- Corporate tax revenue is somewhat lower but total revenue is growing. This particular tax cut is substantially responsible for low unemployment, repatriation of manufacturing, and growth in the economy in general.
- Mandatory spending is about 60% of the budget. It’s mandatory until Congress says it’s not and if they want to keep their jobs I expect cuts are unlikely here.
- Discretionary spending is about 30% of the budget and major cuts would be required to make any significant impact on debt.
The conservative point of view is that the government should not be providing for all of our needs (or wants) as the platform for the Democrat party is campaigning on (government funded health care, free education, Green New Deal, etc.).
If National Debt is our Achilles heel then voting Democrat will permanently cripple us. A more sensible idea is to seriously evaluate discretionary spending.
- Military spending is approximately 15% of all discretionary spending and is more than the military spending of China, Saudi Arabia, India, France, Russia, United Kingdom, and Germany combined. 20% of all military bases are not needed but closing them creates problems for the communities where they are located. I’m for a strong military but expenditures should be justified.
- The Department of Education was created in 1980 and we have seen a continuing decline in student performance ever since. This department is only 1.5% of discretionary expenditures but a penny saved is a penny earned.
- Five percent of the discretionary spending budget is reported as “All Other Agencies”. Who are all these agencies and what are they spending our money on? I read one quote that “no body knows how many agencies are in the federal government”. Looking at each of the 15 departments in the federal government they report a total of 209 agencies within their control. Other reports suggest there are over 400 agencies. Maybe an agency should be created to look at overall efficiencies and overlap within our government. The Office of Management and Budget seems to only report what it is without regard to what it should be.