Hello everybody out there in farm country. This radio commentary is brought to you by the National Corn Growers Association and CropLife America. They are friends, supporters, and allies of a healthy farm economy and prosperous rural America. Thank you.
And now for today’s commentary—
I am out of town today and speak to you by telephone.
We all know that President Trump has an ambitious agenda. One of those projects is to balance our budget. Our rising debt is frightening. It has hit a higher level as a share of our national economy than any time since President Truman. Truman was able to reduce the debt by the time he left office.
That will not be easy for us to do now. Fifty years ago, two-thirds of government spending was discretionary. They cut defense – World War II was over. They cut other programs. At that time, only one-third of spending was mandatory. Today, two-thirds is mandatory. Our big spending is on auto pilot.
At this point, it doesn’t sound like the Congress or President Trump have targeted entitlement programs for any reductions. Social Security, Medicare, Medicaid, and our debt payments will continue to go up. With an older population and rising interest rates, it’s hard to imagine how we can get control of our rising debt. There won’t be much money for defense or discretionary programs.
In 2021, the Highway Trust Fund will run out of money. Social Security Disability Insurance reserves will be broke. The list of shortcomings goes on and on. With our debt at 77% of GDP now and projected to continue to grow, we need to get serious about a solution. It can only be fixed by spending less or taxing more. However, the Republican Congress and President plan to cut taxes – corporate income tax and individual tax.
Our elected officials need to have the courage to make necessary cuts in the entitlement programs. Everything should be on the table. We could help that Highway Trust Fund with a fuel tax increase. We haven’t raised that tax for 25 years. We are living longer and working longer. Raise the Social Security retirement age. When Social Security insurance was introduced under President Roosevelt, the average life expectancy was 65 years.
We don’t know if Speaker Paul Ryan’s 20% “border tax” on products imported into the U.S. will survive. That would bring in a lot of money to help with the budget and to move forward with tax reform.
Dealing with our debt problem is so difficult because politicians fear that they will not get reelected if they raise taxes or take away any government supports or subsidies.
Our debt level rose under President Bush and then doubled to $20 trillion under President Obama. Businesses and farms can’t live like this and neither can our nation.
If you would like to review my radio shows going back more than 20 years, just go on-line to www.johnblockreports.com. Have a great weekend.
Until next week, I am John Block from Washington.