November 18, 2019

An Early Christmas from Congress

Our beloved representatives are working hard to pass a bill that will keep them around for another year but at what cost. Imagine for a moment that Mary and John Jones represent our government. They start off their fiscal year spending well beyond their means running up all kinds of bills. They continue this for almost 12 months until they realize that there is no way that they can pay for everything that they have spent. They head for the government bank to take out a loan that know they can never pay off. In fact, they owe the bank for prior years and one of the problems they have is that they are paying higher and higher interest to the bank on the prior loans. You probably think that this is absolutely poor fiscal management but this is exactly what our government does every year.

The United States government does not operate on a balanced budget. In fact, the budget that is submitted by our President each year is usually a trillion dollars of expenses more than projected revenue. Our government operates on appropriation requests and spending bills which are not tied in any way to any specific revenue. In fact, the entire Iraqi war was funded by appropriation requests to the tune of $1.6 trillion dollars.

To make matters worse, imagine if Mary and John’s source of income came from taxes. Not only do the taxes not cover Mary and John’s expenses but they are so complicated that very few people understand Mary and John’s Tax Code. Imagine it being over 90,000 pages long. To compensate for this complicated code, our “Mary and John” Congress has a series of rolling tax breaks that are renewed each year and usually attached to the government’s request for additional funding. This can include tax breaks for certain companies, the amount of sleep a trucker has to get while doing an interstate haul, to the amount of white potatoes purchased for school lunches.

So in the next few days, you will see this entire scenario played out all over again as it has for the last 18 years. Bills are passed for short term periods, usually days, until our leaders in Congress can agree and pass a spending bill that will keep the government from shutting down for a longer period. With little hope of ever operating on a balanced budget, Congress continues to “kick the can forward” and the interest on the national debt of over $18 trillion dollars now is estimated at $402,435,356,072.49 (that’s billion) dollars for fiscal 2015 to fund a government that continues to spend well beyond its means. Who said there is no Santa Claus?

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Written by
Donald Wittmer

DONALD WITTMER is a retired business executive who held key roles in the automotive and banking sectors. For a time, he also served as a Fiscal Agency Manager for the Detroit branch of the Federal Reserve Bank of Chicago. He received his undergraduate degree from Cincinnati's Xavier University, an M.A. in business management from Central Michigan University, and earned certification in bank operations from the School of Banking at the University of Wisconsin-Madison. A husband, father, and grandfather, he teaches part-time at the Kent Place School for Girls in Summit, New Jersey.

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Written by Donald Wittmer
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