Republicans are driving the national debt to unprecedented heights. Are they really “deficit hawks” as they always claim?
The whole idea that politicians have some kind of guiding principles or ideology is nonsense. What they actually have is material incentives to do what they do, vote the way they vote.
If the very wealthy people who direct most politicians want more spending on the military, or on tax cuts for themselves, that’s what they get. There isn’t some principle or ideology involved.
One thing that really upset Republicans during the Obama Administration was what they called “sequestration.” Under it, they had limits on what they could spend. Republicans wanted it, but only as long as it applied to spending to benefit the people. What galled them was that it also applied to the military. They’ve now broken that restriction and they are once again free to spend the money they want to spend to dominate the world.
When it comes to Medicare, Medicaid, Social Security, education, health care — anything that benefits working people and has to be partially paid for by taxation from the wealthy — they will still claim to be deficit hawks. It would be a funny joke if it weren’t so horrible.
How Long Can They Borrow?
The American government can go on borrowing — selling bonds — as long as they can find someone to buy them. They sold a lot of them since the 2008 crisis, and there was nothing to back them. We didn’t have any more gold, or any more treasure of any kind. America just sold bonds, and people, especially people in other nations, bought them.
Theoretically, that could go on forever. When another nation, say China, invests in United States Treasury Bills, as they often do, they are committing to a continuation of world economic stability based on the U.S. Dollar and United States economic domination. Otherwise, they wouldn’t get their bond money back.
It would be interesting to examine the cost of debt servicing now that the American debt is shooting up over $20 trillion dollars. I found a number: $174,800,239,416.18 that is supposed to represent the service cost for the last year. That’s $175 billion. https://www.treasurydirect.gov/govt/reports/ir/ir_expense.htm
The amount goes up or down depending on the interest rates. But if people, especially people in other nations, become more reluctant to buy bonds, and if America keeps selling them, as they must, then the interest rates will necessarily go up. The cost of servicing the debt will go up, too.
This brings me back to the question of military spending. If the United States can still destroy any other nation, then it isn’t likely that any of them will stop cooperating with the worldwide economic system as it is. So, how long can America borrow? As long as it can find lenders.