The other day, Washington Post columnist E.J. Dionne wrote a column in which he posed the question, “What if we’re not broke?” Dionne concluded that we’re not actually broke and that “a phony metaphor [the idea that we’re broke] is being used to hijack the nation’s political conversation and skew public policies to benefit better-off Americans and hurt most others.”
Dionne might as well have written a column posing the question, “What if the moon landings never really happened?” or “What if LBJ was behind JFK’s assassination?” because, as it turns out, we’re broke by any conventional meaning of the term “broke.”
This year the federal government will collect $2.17 trillion and spend $3.82 trillion. In other words, the federal government is spending 76% more than it’s taking it. Last year the federal government spent 49% more than it took in. Our national debt is fast approaching 100% of our GDP, and our unfunded and underfunded liabilities — Social Security, Medicare and Medicaid — now total more than $66 trillion. If the federal government were a company, it would have a negative net worth of $45 trillion.
State governments are also in trouble. Collectively, the states have amassed $3 trillion in unfunded liabilities, and it’s looking increasingly likely that several states — including Illinois and California — will need to be bailed out by our broke federal government.
If I spent well more than I made, year after year, you’d say I was “broke,” even though I could probably pay off my debts somehow — either by taking a second job, robbing my neighbors, or winning the lottery. Likewise, federal and state governments can theoretically avoid going bankrupt — either by dramatically raising taxes, dramatically cutting spending, or both. But to say that we’re not broke is to strip the word “broke” of any real meaning.
The worst part is that it’s not clear that we’ll be able to escape from our fiscal mess.
Let’s briefly run through our options:
We could cut discretionary spending. But even if we eliminated all non-military discretionary spending — which is totally impossible — we still wouldn’t be able to balance the federal budget.
We could cut entitlement spending. Raising the retirement age and trimming benefits would go a long way towards solving our problems, but entitlement programs are popular, and most politicians are afraid to touch them.
We could raise taxes, but pro-tax Democrats weren’t even able to raise taxes on the richest 2% of wage-earners last year, when they controlled the presidency, the House and the Senate. Not that raising taxes on the rich would make much of a difference anyways: the federal government would have to confiscate nearly 80 percent of all income over $209,000 just to get the federal deficit down to 3% of GDP. And raising taxes on the middle class is something that Democrats aren’t even willing to propose.
In an interview earlier this month, Charlie Sheen said, “when you’re bound by . . . terrestrial descriptions, you must use the best term available.” Sheen was discussing how his girlfriends — who he calls “goddesses” — are more beautiful than the word “goddesses” suggests. Just as the word “goddesses” fails to accurately describe Sheen’s girlfriends, the word “broke” fails to accurately describe the fiscal straits we’re in. Hopefully a linguist will one day think of a better way of describing the financial situation of a country that is tens of trillions of dollars in debt, but in the meantime, we’re stuck with the word “broke.”
Peter Tucci is an editor at The Daily Caller.