Due to clashes between the two major political parties, weak governance, and huge military expenditures driven by a Cold War mentality, the U.S. is now unable to pay back its debts without borrowing new money.
The U.S. Treasury Secretary Janet Yellen warned that the U.S. might face a default for the first time in history on June 1, provided Congress fails to raise the debt ceiling. U.S. President Joe Biden canceled his trip to Australia and Papua New Guinea and returned home to hold talks on raising the debt ceilings.
Since the beginning of this year, politicians from both parties have proposed possible deals related to the national debt, but these have all gone nowhere. Republicans have offered two options for solving the debt “crisis” since the federal government hit its legal debt limit of $31.4 trillion in January. Their proposals amount to just cutting government spending, which Democrats have rejected.
The debt ceiling is a lawful limit to restrict the U.S. government from borrowing money. As debt has increased over the years, Congress has had to raise the debt ceiling more frequently—22 times since 1997.
The U.S. has seen federal debts increase exponentially in the past two decades, and there are a few major reasons.
In October 2001, when the U.S. launched its war in Afghanistan, the debt was barely $5.8 trillion. The amount now, 22 years later, is more than five times higher.
The debt-to-GDP ratio has also become exorbitant. Under the Clinton and Bush Jr. administrations, the debt-to-GDP ratio was kept at 70%. The 2008 Great Recession pushed it above 100% for the first time. The ratio kept soaring as the years passed, reaching a historical high of 128% in 2020.
Debts are intimately linked with income and budget. The budget and bills proposed by the White House and approved by Congress show the priorities of the U.S. government and speak to its willingness to keep healthy finances. The major spending sectors, from highest to lowest, are Social Security, Medicare, Medicaid, the military, education, interest on debt, tax credits, veterans services, and nutrition.
Partisan differences on spending priorities have impeded the federal government’s ability to cut expenditures. Democrats, understandably, insist on keeping Social Security benefits and funds for Medicare; Republicans reject any reductions in military spending.
Since the interest on current debt, which already amounts to 8.8% of annual expenses, must be repaid to borrowers regardless, the remaining sectors for possible cuts, from the perspective of American politicians, are education, tax cuts, veterans, and nutrition.
Partisan division and the rotating election of new governments supersede past policies with nascent programs and the investment of fresh overhead—long-term planning becomes nearly impossible.
The U.S. federal government also suffers from weak governance and profligacy, which financially compromises the state. According to reports from the Government Accountability Office (GAO) issued in May 2022, the total “financial benefits” from reducing fragmentation, overlap, and duplication across the federal government amounted to $552 billion from 2011 to 2022.
The report sugar-coated money loss as saved “financial benefits.” What about the money wasted for years beforehand?
Instead of restructuring the country’s debts and changing spending habits, the U.S. has, on the other hand, clung to wasting dollars on trying to maintain military hegemony over the globe.
The budget for the Department of Defense in FY 2023 is over $770 billion, which accounts for more than half of the total deficit of FY 2022.
In terms of military deployment globally, as of 2021, the U.S. has installed about 750 military bases in more than 80 foreign countries. The building of new bases overseas has not halted. Earlier this year, the U.S. secured access to four new military bases in the Philippines.
Who eventually pays for that expanding empire? And who benefits from it? It is clear that most of the spending goes to the military–industrial complex and barely a dime for the average American taxpayers.
As with all op-eds published by People’s World, this article reflects the opinions of its authors.
We hope you appreciated this article. At People’s World, we believe news and information should be free and accessible to all, but we need your help. Our journalism is free of corporate influence and paywalls because we are totally reader-supported. Only you, our readers and supporters, make this possible. If you enjoy reading People’s World and the stories we bring you, please support our work by donating or becoming a monthly sustainer today. Thank you!
CONTRIBUTOR
Comments