Alarmed by debt. Republicans are willing to use government spending — and massive debt — as Exhibit A in their case that Democrats are driving the country into bankruptcy.

The pandemic has triggered a spending spree. It’s true that debt skyrocketed during the Covid-19 pandemic, when bailouts passed on a bipartisan basis under President Donald Trump and by Democrats under President Joe Biden sought to keep Americans and businesses afloat.

Both parties are responsible for the debt, and the government has shown its willingness to increase it on several occasions.

Here is the stock of public debt in the first days of the last three administrations, according to the Treasury Department:

  • $10.6 trillion when Barack Obama took office on January 20, 2009.
  • $19.9 trillion when Trump took office on January 20, 2017.
  • $27.8 trillion when Biden took over on January 20, 2021.

In short: the government likes to spend and is reluctant to tax.

Spend more. An unpaid war during the George W. Bush years. A stimulus bill and bank and auto bailouts designed to end the Great Recession during the Obama years have been linked to the effort to ensure that every American has health insurance.

Tax less. Tax cuts during the Trump years were supposed to help businesses grow, but the budget deficit also grew.

Unforeseen expenses. The Covid-19 pandemic has led to the government spending trillions of dollars to supplement unemployment when people were out of work, help businesses survive the pandemic and more.

Upgrades needed. Add to all that much-needed infrastructure spending lawmakers from both parties coming together to pass in 2021.

Unfinished. Democrats want to add even more to the ledger, but have so far failed to implement their plans to fight climate change and strengthen the social safety net by giving American children universal pre-kindergarten, helping parents with childcare costs and fighting child poverty, among many others. other efforts.

Sen. Joe Manchin, the West Virginia Democrat, essentially killed his party’s plan for that biggest spending package last year, and he cited the national debt and inflation as reasons.

He argued that the country should be ready for the next unexpected event.

“What do we do if the pandemic gets worse under the next viral mutation? What do we do if there is a financial crisis like the one that led to the Great Recession? What if we face a terrorist attack or a major international conflict? America is reacting to such crises if we spend trillions of dollars unnecessarily today?” he wrote in the Wall Street Journal in September.

His colleagues disagree that spending on climate change and social programs is unnecessary.

To worry or not to worry? CNN’s Matt Egan wrote a detailed report on the $30 trillion milestone and noted that experts are divided on how worried people are. The quotes below are taken from his story.

To worry! “…the latest debt milestone comes at a tricky time as borrowing costs are expected to rise.”

Borrowing costs will rise because the Federal Reserve, seeking to control inflation, is about to start raising interest rates.

To worry! “Interest costs alone are expected to exceed $5 trillion over the next 10 years and will account for nearly half of all federal revenue by 2051, according to the Peter G. Peterson Foundation, an organization focused on raising awareness of the budgetary challenge.”

Do not worry! “…the federal government’s interest payments as a percentage of GDP are lower today than in the past. And that gives confidence to many economists that this is not an immediate crisis. In By 2021, interest as a percentage of GDP was 1.5%, down from 3% in the early and mid-1990s, according to the St. Louis Federal Reserve Bank.

Do not worry! At least not yet. “We’re on an unsustainable path,” (Fed Chairman Jerome) Powell told lawmakers last month. “The debt is not at an unsustainable level, but the path is unsustainable – meaning it is growing faster than the economy, significantly faster than the economy. We need to address that over time. We We’ll fix it over time. And the best way to do that is soon.”

To worry or not to worry, continued. Egan also spoke with experts who described the United States’ relationship with debt as addictive. Acting too quickly could be harmful.

To worry! The Peter G. Peterson Foundation has raised concerns about the debt its main objective. He points to the imbalance in funding for programs such as Medicare and Social Security as evidence that debt needs to be brought under control.

“Washington’s leaders have made reckless decisions over the decades, time and time again choosing a new tax cut or a favorite spending package above our collective future,” CEO Michael A. Peterson said in a statement. communicated.

Do not worry! Other experts, such as economist Stephanie Kelton, have argued that a government like the United States, which controls its own currency, can sustain large deficits and debts.

She explained the theory to me in 2019, and the arguments hold up.

“Remember their red ink is our black ink, she said of government spending.

Expenses go into the economy, and that can help people.

She said at the time that she would rather see corporations pay more taxes and the government spend more to help its citizens.

Pay the debt. A major complication every few years is the politically tense dance required by lawmakers to raise the debt ceiling and pay the bills it has already incurred. Every time there is a stalemate on raising the debt ceiling, it shatters the idea that debt is safe.

More recently, Senate Republicans quietly agreed to a complicated one-time filibuster exclusion to allow Democrats to raise the debt ceiling by $2.5 trillion without a Republican vote. The government can probably continue to borrow money until 2023.

Who owns the debt? The national security element of debt is another growing issue as Biden grapples with China’s growing power. While the government and national entities hold most of the debt, much of it – nearly $8 trillion — belongs to foreign countries like China and Japan.

Debtor Nation. The United States has been in debt throughout its history. Exemption? A two-year period beginning in 1835 under President Andrew Jackson.

It is unlikely that he will be debt free again.