Monthly Note From a DC Insider

Mike McKenna is one of the good guys in Washington. He’s a long-time strategist and analyst on the political scene, an op/ed writer at the Washington Times, and former official in the Trump administration. He is also a former colleague from my time in the oil and gas industry, and has given me permission to share this January edition of a monthly note he sends out to a long email list.

In short, this is really good stuff. Give it a read - you’ll be glad you did.

From:  Michael McKenna

Date:   January 30, 2023

Re:      January monthly note

           The year has started off slowly, but that has not stopped me from procrastinating and not getting this note out until the very end of the month.  I’ll try to be brief and stick to the highlights.

Debt ceiling

Earlier this month, the Department of Treasury announced that the federal government had reached its statutory debt ceiling ($31.4 trillion, 120% of our Gross Domestic Product, or about $90,000 for every man, woman, and child in the United States).  That announcement surprised many who were expecting the debt ceiling to be reached in the third quarter of this year (which it will probably be, after “extraordinary measures” are expended).  By accelerating the announcement and heightening the sense of crisis, Team Biden hopes to complicate and retard Republican efforts to exact spending concessions in exchange for raising the debt ceiling.

They probably could have saved themselves the trouble.

The reality is, of course, that runaway federal spending is a bipartisan problem.  In the last 50 years (with a couple of notable although momentary exceptions) neither party has shown any sustained interest in spending restraint.  The numbers tell the story pretty clearly.  In the last 20 years, across Republican and Democratic administrations and Congresses, federal spending has increased from $2 trillion in 2002 to more than $6 trillion in 2022.  Twenty years ago, federal spending was just 18.6% of GDP.  In fiscal year 2022, that percentage was 25.6%.

The fundamental problem is that spending taxpayer cash is what Members of Congress do.  When you hear a Member of Congress talk about “achievements,” they are almost always referencing the passage of legislation that spends money on their personal priorities.  For most of them, the principal priority is reelection.

It doesn’t have to be this way.  We can balance the budget.  We’ve done it before.  Our forefathers ran surpluses while fighting dinosaurs.  Just kidding.  As recently as 2001, the federal government has run a surplus.