The status quo is back — expect them to cry about the budget deficit
By Kent R. Kroeger (January 21, 2021)
Political scientist Harold Lasswell (1902–1978) said politics is about ‘who gets what, when and how.’
He wrote it in 1936, but his words are more relevant than ever.
In the U.S., his definition is actualized in Article I, Section 8 of the U.S. Constitution:
The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defense and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;
To borrow Money on the credit of the United States;
To regulate Commerce with foreign Nations, and among the several states, and with the Indian Tribes;
To establish an uniform Rule of Naturalization, and uniform Laws on the subject of Bankruptcies throughout the United States;
To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures.
In short, the U.S. Congress has the authority to create money — which they’ve done in ex cathedra abundance in the post-World War II era.
According to the U.S. Federal Reserve, the U.S. total public debt is 127 percent of gross domestic product (or roughly $27 trillion) — a level unseen in U.S. history (see Figure 1).
Figure 1: Total U.S. public debt as a percent of gross domestic product (GDP)
And who owns most of the U.S. debt? Not China. Not Germany. Not Japan. Not the U.K. It is Americans who own roughly 70 percent of the U.S. federal debt.
Its like owing money to your family — and if you’ve ever had that weight hanging over your head, you might prefer owing the money to the Chinese.
When it comes to dishing out goodies, the U.S. Congress makes Santa Claus look like a hack.
But, unlike Saint Nick, Congress doesn’t print and give money to just anyone who’s been good— Congress plays favorites. About 70 percent goes to mandatory spending, composed of interest payments on the debt (10%), Social Security (23%), Medicare/Medicaid…