Concord Coalition presents us with fiscal realities that aren’t pretty

Claims from politicians could make people think something is going on to restore fiscal integrity to the United States.

President Biden, signing the recent huge climate change, tax and healthcare bill, cited its results in lowering the deficit. U.S. Sen. Maggie Hassen is cited in her ads (fueled by a reported $26 million+ of out-of-state financing, thanks to the Citizens United decision) as a budget hawk, or “Fiscal Hero.” Here are the facts.

At a recent board meeting of the Concord Coalition in Concord, Bob Bixby, executor director of the organization, which was founded by the late Senators Warren Rudman of New Hampshire and Paul Tsongas of Massachusetts – and funded by the late investment banker and Commerce Secretary Pete Peterson – stark fiscal realities were presented that should give no comfort to the majority of Congress from either party and should scare the living daylights out of their constituents.

First, the percent of the deficit as a part of the gross domestic product is projected to increase from the present 4 percent to 11.1 percent in 2050 if present policies are not adjusted.

Where does this deficit come from?

Revenue now is $4.836 trillion, coming from individual income tax ($2.623 trillion), payroll taxes ($1.465 trillion), corporate income tax ($395 billion) and other taxes and fees ($354 billion) for a total of $4.836 trillion. Against that is spending, which is made up of Social Security ($1.212 trillion), major healthcare programs ($1.421 trillion), mandatory spending ($1.118 trillion), defense ($760 billion) and discretionary spending ($962 billion). Add to that the current payment on the debt of $399 billion, at record low interest rates, and you get the total of $5.872 trillion in spending, resulting in a deficit of $1.036 trillion. Per year.

Federal spending has regularly exceeded revenue since 1970, and before.

Spending was an average of 20.4 percent of the GDP from 1970 to 2019, and is projected to be 24.3 percent in 2032, with revenue averaging 17.4 percent in the period and 18.2 percent by 2032.

We pay for this with the interest component of the federal budget through taxes or a growing deficit and debt. According to the Congressional Budget Office, net interest costs in the federal budget are predicted to increase from 1.6 percent of the GDP in 2022 to 7.2 percent in 2050.

Compare that to the percent of the budget spending above, and the ability to pay for things people want or tell their congressmen they need. At the same time, Social Security will rise 1.5 percent, Medicare 2.9 percent and Medicaid 0.1 percent.

Net interest costs will rise, even at low interest rates, from $399 billion in 2022 to an estimated $1.6 trillion in 2032, robbing the U.S. of the ability to address issues, defend Western democracy or fight climate change.

While all this increase in spending is going on, the GDP is estimated to be able to grow at a maximum of 5 percent per year, way short of paying for the increased costs. Add to that an aging U.S. population, costing more and contributing less, and since our immigration policies and birth rate do not replace workers, it’s predicted that in in 2052, 51.8 percent of us will be age 65 or older. Age and productivity produce economic results, and they are not in our favor. What does this produce in the end? National debt, which is on an unsustainable path, growing from just shy of 100 percent of the GDP to 180 percent in 2050 if nothing is done. This is not sustainable.

So as you go to vote this fall, consider who is most able to deal with this economic reality. The Democrats have passed massive new spending with only recent Band-Aids to deal with things slightly, which frankly are better than doing nothing. Republicans fight with each other on how to cut revenue more on some kind of crazy quest that tax cuts somehow will result in lower spending, which they never have.

Look for candidates who promise some kind of fiscal responsibility that works, and have the fortitude to vote for them, even if it looks like the mean uncle who promises vitamins and vegetables instead of ice cream. If you can find any such candidates.

Your country depends on it.

Brad Cook is a Manchester attorney. The views expressed in this column are his own. He can be reached at bradfordcook01@gmail.com.