Reckless spending by Washington

Forty-five years ago, this summer, I was waging an unsuccessful campaign for the New Jersey Assembly. My lead issue was the need to amend the U.S. Constitution to require our Congress to adopt a balanced budget. I wanted New Jersey to petition Congress to initiate the process by adopting a resolution and submitting it to the 50 state legislatures for their consideration.

I had been watching federal spending increase and was concerned by all the red ink. Things have gotten much worse. In 1979 the federal deficit stood at 31.5 percent of the American gross domestic product (“GDP”). Today our deficit is 120.5 percent of GDP. In the past 45 years Congress has balanced its budget a total of three times. Our current deficit stands greater than $1.2 trillion (+) (See: https://fiscaldata.treasury.gov/americas-finance-guide/national-deficit/)

Truth be told, Congress rarely adopts a formal budget. It now adopts “continuing resolutions” spending money on what the President and the Congressional majority thinks best to keep constituents happy. The Democrats stopped long ago, even talking about responsible spending. The only time Republicans talk ‘fiscal responsibility” is when there is a Democrat in the White House. President Ronald Reagan got elected twice preaching fiscal responsibility, but not once in eight years did he propose a single balanced budget to Congress.

So, how did we get to this bizarre state of affairs? Well, in 1950 the top income tax level was 91 percent. Today it is 37 percent. The ultra-rich of our country decided they no longer wanted to pay their fair share of America’s tax burden. During the past half century, the ultra-rich have successfully lobbied Congress to not only reduce tax rates, but to carve out loopholes in the federal tax code. The end result? There are billionaires who pay nothing in taxes.

I have in common a literary agent with the New York Times economist/editorialist, Paul Krugman. He frequently writes editorials advising readers not to worry about the federal deficit because the U.S. Dollar is the strongest economy and currency in the world. Twice, following two such editorials, I emailed Krugman and asked if he might have a different opinion if the Chinese were to become the leading currency. Neither time did he reply.

China wants to be the “Big Dog” on the world stage. Chinese President Xi Jinping would be thrilled for their currency, the Renminbi, to become the international currency. If/when that occurs, our nation will be a deep trouble.

Nelson Johnson is an American author and former judge, lawyer and historian, best known for his 2002 New York Times bestseller, Boardwalk Empire: The Birth, High Times, and Corruption of Atlantic City.