In fractious and tumultuous times, it can be a challenge for important news of less immediate impact to wrest attention from current events getting the most ink, airtime, bits and bytes. What’s surprising, though, is when a development that until recently would have dominated the news is back-burnered with nary a peep, figuratively speaking.
Receiving very little attention last week were figures released by the Treasury Department showing that the country’s annual budget deficit increased dramatically by $205 billion — or 26 percent — to $984 billion during the fiscal year that ended Sept. 30. The annual deficit, which is the amount by which the country’s tax and other revenues exceed its spending in any year, is now projected to exceed $1 trillion in the current, 2020 fiscal year. To understand the enormity of that projection, imagine that in one year you spent $1,000 more than you earned. Do that a billion times more and you’ll have overspent revenue by $1 trillion.
The source of the widening of the deficit is easy to pinpoint — tax receipts have fallen as a result of the Trump administration’s 2017 tax cuts, and the cuts haven’t stimulated the economy sufficiently to offset the cost of increased federal borrowing needed to pay for them. This may be surprising to devotees of so-called supply-side economics and predictable to those who deride that trickle-down approach. But it should be extremely worrisome to all and certainly deserves more attention than it has received.
Most surprising is the quiescence of Republicans toward the ballooning deficit, yet Democrats should be alarmed as well. The annual deficit is now at its greatest since 2012, when the unemployment rate was twice its current level and the country was only just beginning to emerge from the Great Recession. With the unemployment rate now at a 50-year low and the country in its longest economic expansion ever, even greater deficits will be in the cards if — or, based on history and the view of many economic forecasters, when — any kind of economic slowdown takes hold that drives up usage of safety-net government programs and slows tax receipts further.
Far too many Democrats, including some of the party’s leading presidential candidates, tend not to discuss addressing the widening deficit and instead push increasing taxes on the wealthy to pay for expanding social programs. President Trump, who throughout his business career has zealously embraced debt, is surely unlikely to be concerned, at least while the stock market remains high and no economic downturn has taken hold. Those responses are predictable, but the unwillingness of other leading Republican politicians to speak out on the deficit — which had long been a signature GOP issue — is mystifying.
Somehow, the ballooning of the federal budget deficit must be addressed if we are to avoid an economic train wreck during the inevitable next downturn. Doing so will require both parties and whoever occupies the White House to compromise on such issues as raising taxes and finding responsible cutbacks in the growth of social services and military spending. What won’t help at all is for the alarming growth in the country’s red ink to be ignored.