Do We Care about the National Debt?

Yup, that’s a lot of debt. (Photo Credit: Justin Sullivan/Getty Images)

Alongside the immigration issue, the topic of the GOP tax overhaul is likely to be a prevailing theme leading up to the 2018 midterm elections in November. Republican candidates will be looking to tout its successes, and possibly the Trump White House’s political and economic agenda. Democrats will be looking to hammer their Republican counterparts over the idea the tax cut is intended to primarily benefit the wealthiest of the wealthiest Americans, not to mention corporations, which—and this seemingly can’t be stressed enough—are not people. In both cases, talk about our skyrocketing national debt will apparently be sparing as far as the national consciousness is concerned.

Before we get too ahead of ourselves, let’s talk about the more immediate tangible benefits that American families might experience, and in doing so, not be as dismissive as some Democratic leaders might be. Numerous companies have cited the GOP tax cut as the impetus for bonuses allotted for their employees, and one-time giveaways aside, many workers may have noticed appreciable increases in their take-home pay related to the tax law changes. Even when accounting for context, however, the public comments made by key Democrats don’t seem to assuage the contention coming from conservative circles that the Democratic Party is out of touch with the rank-and-file of the country. Nancy Pelosi, in particular, has been assailed for likening the $1,000 bonuses some people have received to “crumbs” relative to the gains wealthy individuals and large businesses will expect to receive as a result of this policy shift. My girl Debbie Wasserman Schultz (sarcasm intended) also caught flak for her comments as the same event that she wasn’t sure $1,000 goes far for almost anyone. Maybe, ahem, not to the likes of the Democratic National Committee, Rep. Wasserman Schultz, but $1,000 isn’t exactly chump change.

So, yeah, the positive aspects of the tax cut are not something to merely brush aside with a wave of the hand. Like crumbs. Or “deplorables,” recalling Hillary Clinton’s epic-fail gaffe. That said, if and how these bonuses apply for the average worker in the short term, and some real global economic concerns over the long term, serve to place the boasts of Donald Trump and Republican Party congressional leadership in a bit of a different light. According to a report by David Goldman and Jeanne Sahadi for CNN and citing a recent survey by Morgan Stanley analysts, only 13% of businesses’ tax cuts will go to bonuses, employee benefits, and pay raises, while 43% of the cuts will go to investors in the form of dividends and stock buybacks, which undoubtedly will involve some executives who are compensated in terms of stock incentives. That’s not nothing, but it’s also not to say that the American worker is a priority in this respect. The CNN report also cites statistics indicating that while companies have announced tax-cut-related bonuses and raises affecting some 3.5 million U.S. workers, that’s less than 3% of the 125.5 million U.S. workers in the employ of a company. Again, not nothing, but it imaginably might seem more like winning the lottery to those who don’t receive such rewards. And God forbid if you are underemployed, unemployed, or “work in the home” and don’t receive a traditional wage.

The obvious rebuttal to this criticism is that the tax cut was just recently put into effect, so it will take time for the economy to grow in proportion to its benefits, and for businesses to hire more and invest within the United States. Based on the way the law was written, however, there are plenty of red flags to be had. The Tax Cuts and Jobs Act of 2017 paves the way for permanent tax cuts for corporations, but on the individual taxation side of things, the modified rates are set to sunset by 2026. This means an extension of the Act’s provisions will need to be ratified by then, and seeing as Congress can’t seem to agree on anything these days except throwing ungodly sums of money at the military, this seems all but certain. In other words, the benefits of the tax cut—if they are to be enjoyed by as many members of the general public as the White House avers they will—are temporary, much like the one-time bonuses that companies are awarding to their employees.

And then there is the matter of our ever-escalating national debt. Annie Lowrey, writing for The Atlantic, probes the intersection of U.S. deficit spending with the GOP tax cut in relation to conservative Republican ideologies. In the onset, Lowrey speaks to the seeming strangeness of Donald Trump to make America’s debt a glaring omission from his State of the Union speech. She writes:

ISIS, tax cuts, public trust. Race, immigration, the Empire State Building. Civil-service reform, North Korea, manufacturing. President Donald Trump’s State of the Union speech addressed a broad sweep of issues. But one central economic topic went notably missing: the country’s growing annual deficits and its increasing burden of debt. The omission was a sign of the remarkable volte-face the Republican Party has taken on the country’s fiscal situation in just a few years. Republicans spent the early years of the recovery obsessed with the national debt, castigating Democrats for their supposed irresponsibility, warning about the dangers of the almighty bond market, and helping to construct complicated mechanisms to slash federal outlays. They are now spending what might very well be the late years of the recovery ignoring it, having passed a tax plan that will add more to the debt than President Obama’s stimulus package did and having forgotten their once-urgent plans to make cuts to Social Security and Medicare.

While this trend may prompt deficit hawks like Rand Paul to sob gently to themselves, Lowrey seeks not to be abjectly critical of Republicans in this regard, but rather to underscore just how much of a 180 this position is from the Tea Party fever which ushered so many Republicans into office and paved the way for a decade of legislative defeats for the Democratic Party. While Trump is not your average Republican and all politicians are liable to break their campaign promises—Trump, despite not being a lifelong politician, is a salesman and pathological liar, so somehow even more liable to do so—even he ran on a campaign of reducing our annual deficits and balancing the budget. If there is criticism to be leveled on Lowrey’s part, it is more so on the side of the Republicans’ past obsession with spending that sent the federal government into shutdown mode at least once and gave GOP members of Congress ample opportunity to rail against the Obama administration’s supposed largesse.

Now with Donald Trump as President and Commander-in-Chief on top of Republican control of both the House of Representatives and the Senate, the shoe is on the other foot, and with the change has come the aforementioned commensurate reversal on the topic of deficit spending. While a minority of American workers are presently receiving one-time gains or improvements to the benefits they receive from their employers, as a result of the Tax Cuts and Jobs Act, according to figures from the Congressional Budget Office and the Joint Committee on Taxation cited by Annie Lowrey in the article, the tax cut would add $1.8 trillion to the national debt over the 2018 to 2027 span. Not million. Not billion. Trillion. While the magnitude of the addition to the debt might be vaguely surprising, though, the mechanism should not. By effecting a tax cut, it’s a direct drain on revenue paid directly to the government. At the same time, meanwhile, Republicans have more recently shied away from the entitlement reform and domestic program cuts that have previously been a rallying cry for the party, and have further turned the dial up on this trend with calls for more military spending. Mentions of deficits and debt during congressional proceedings, too, have largely decreased since peaking in 2011, and the Trump administration, ever the depiction of tumult, is even more loath to broach the subject, and when it does, as Lowrey notes, its officials do so “with little sense of outrage or concern.”

Is this attitudinal change with respect to the national debt indicative of a seemingly inherent hypocrisy in major-party politics—i.e. when we’re in office/the majority, the same rules need not apply—or simply reflective of a sea change regarding how all of us have come to regard deficit spending? To be honest, it’s probably a little from Column A and a little from Column B. As one Obama-era economic adviser quoted in Lowrey’s piece believes, Republicans’ prior importance placed upon the debt was merely a tactic to garner short-term political capital. To boot, retrospective thinking from experts on the trouble the United States might face in relation to its debt suggests worries based on European credit crises like the one notably faced by Greece may have been overstated, not to mention concerns about how deeply the American public is invested in this topic.

On the latter count, and citing a study by the Pew Research Center, Lowrey notes that whereas 72% of respondents named reducing federal deficits a top priority in 2013, today, fewer than half of those surveyed do. That the U.S. economy is performing well overall at the moment is an important factor herein, but also playing a role is growing attention other political and social issues, namely drug addiction/the opioid crisis, the environment, and improving the nation’s infrastructure and transportation. From our perspective, then, it may not be a case so much of not caring about economic issues like the national debt as much having a lot on our plates. Besides a majority of Americans still viewing the economy as a pivotal priority, fears about terrorism and preoccupations of the state of education in the United States weigh heavily on people’s minds.

Again, though, this isn’t solely a knock on Republicans. If Democrats were in power, there is every indication they’d be running up the country’s debt and not expressing outward reservations about doing so. This is not to say that all deficit spending is inherently bad; investments made which can lead to future growth or prevent future calamity come with a cost. That said, as with personal debt—a subject with which a seemingly increasing number of Americans have become familiar—the national debt is a “drag on the economy,” as a representative of the Committee for a Responsible Federal Budget, quoted in Lowrey’s piece, highlights. Meanwhile, even if GOP leaders have temporarily put aside talk of dismantling core components of the U.S. social safety net, this is not to say that these programs do not need improving. With next year’s annual budget deficit set to top $1 trillion and concern for the sustainability of this arrangement seemingly on the decline, if what Annie Lowrey and other observers say is true, things are likely to get worse before they get better on the debt front. Just how bad, and whether or not a bursting of this bubble might produce a credit catastrophe, unfortunately remains to be seen.

Now that the Tax Cuts and Jobs Act has been signed into law and we have ample time to actually stop and think and wax philosophical about it, the Republican Party’s strategy is not altogether unsound from the perspective of manipulating public opinion. By the time the individual provisions of the tax cut are to sunset, we’ll be at least two more presidential election cycles down the road. Thus, the GOP can likely reap the rewards of the short-term political gains they’ve helped foster presently, and by the time Donald Trump is out of office (hopefully long before 2024, but these days, given the political atmosphere, I don’t like to get my hopes up) and Democrats have gained a majority in one or more wings of Congress or control the White House, they can defray any ill will they might have incurred related to the tax cut by pointing to the disastrous economic and social policies of the liberal left. In a 24-hour news cycle where viewers are already primed to quickly forget what just happened, it’s a fair bet that many of us will forget who the architects of this concession to corporate executives and wealthy benefactors even were.

This, to those of us insistent on documenting this chapter in American history, is rather obviously a long con. And I do mean con. In effect, it’s part of an even longer-term confidence trick that conservatives and neo-liberals have been imposing on the American public. Though officially titled the Tax Cuts and Jobs Act of 2017, the GOP tax cut is dyed-in-the-wool trickle-down economic theory. The primary beneficiaries of its amendments to tax law are corporations and business owners, under the idea that fewer taxes paid means more money to be invested in creating jobs and improving conditions for workers. The reality is that numerous corporations, financial experts and firms making use of the carried interest loophole, and pass-through entities have been taking advantage of favorable aspects of the tax code for years, and that the insistence from critics on the right that regulation and taxation is killing American industry tends to be overstated. There are a number of complex factors that go into why businesses succeed or fail, including changing social norms and advances in computer/automated technology, but consumer demand and discretionary spending are a crucial part of this mix. As for the employment side of the equation specifically, if firms are offering bonuses and other incentives to their workers, it is most likely not a sign of their generosity, but rather a competitive strategic move. In a tight job market, when companies like Walmart are raising wages, it’s an indication they’re doing so because they feel they have to survive.

Moreover, with the lowering of the top individual tax rate and the permanent slashing of the top corporate rate, the Tax Cuts and Jobs Act, given its signaled priorities, is very clearly class warfare. The GOP tax cut, ostensibly a boon for the middle class, working class, retired Americans, and the poor, is visibly skewed toward the most profitable companies and wealthiest individuals, and with caps on deductions for state and local taxes and property taxes, as well as the elimination of the personal exemption, the emphasis is not only on limiting the ability of the rank-and-file to alleviate their tax burdens, but to punish states like California, Connecticut, New Jersey, and New York—states that all went blue in the 2016 election, it should be noted—that feature higher-than-average tax rates and were more liable to take advantage of superior SALT deduction policies. As alluded to before, too, Republicans’ success in passing tax “reform” legislation greases the wheels of attempts at entitlement “reform.” Which essentially means cuts to programs like Social Security, Medicare, and Medicaid, because all that lost tax revenue is going to have to be made up somewhere else, and in all probability, it will not be coming from the untold sums stashed by the wealthy in offshore banking accounts and other tax havens.

The national debt is a real concern. However, it’s not a politically sexy topic right now, and with the stock market seeing record highs (when it’s not seeing dips related to fears about rising interest rates), it is seemingly of less interest to many of us as well. As yearly deficits continue to mount, and as questions of sustainability persist, it begs the question: how much longer can we continue to ignore that $20+ trillion elephant in the room?

Bernie Sanders vs. Corporate America: The Three-Round Showdown on Financial Responsibility

Float like a butterfly, sting like a bee? Not exactly, but Bernie hasn’t been shy about mixing it up with various high-profile CEOs. (Image retrieved from

If there’s one thing Bernie Sanders has succeeded in doing this election cycle, it’s pissing people off. The wealth of amateur economists and financial experts opining in “Comments” section of news websites and on social media who apparently think Sanders is a flaming idiot who hates America, doesn’t understand simple math, and wants to tax you to the point you are forced to live in a cardboard box on the street, or at least a more stately cardboard duplex with a communal cardboard pool. The Clinton supporters who think Bernie should have never been in the race, should stop attacking her candidate, and should get off his unicorn and accept the cold, hard realities of pragmatism. Those social critics who would depict Sanders as an enemy of capitalism, coal, innovation, Israel, the media, Newtown, CT, poor white people, Wall Street, women, and somehow, both the world’s rich and the world’s poor. Indeed, for all the goodwill Bernie Sanders has built up among scores of young voters and those who have sought a non-Clintonian path to the Democratic Party’s renaissance, the democratic socialist secular Jew has inspired his fair share of antipathy over the past year and change.

One particular group which has drawn the ire of Bernie and his faithful, and which has responded to his criticisms in kind, is that of corporate executives, particularly those of General Electric Company, Verizon Communications, Inc., and the Walt Disney Company. By now, you understand I am an avid supporter of the senator from Vermont (if you don’t fully comprehend this, just take a gander at this other piece I wrote for United States of Joe; please—I could use the views), so I can’t really be considered an unbiased judge in the war of words that has manifested between the two opposing sides. I will thus present their arguments to you—the members of the general public—and let you decide their merits. So, without further ado—and not adieu, because that makes no bleeping sense—let us have our debate. Grab your scorecards—this could get moderately interesting.

Round 1: Bernie Sanders vs. Jeffrey R. Immelt, General Electric CEO

In the blue corner, we have the Bruiser from Brooklyn, the Fighting Father of Free Tuition, the Rabble-Rouser of Raging Against the MachineBernard “Bernie” Sanders!

Sanders on GE’s taxes: “From 2008 to 2013, while GE made over $33.9 billion in United States profits, it received a total tax refund of more than $2.9 billion from the Internal Revenue Service. G.E.’s effective U.S. corporate income tax rate over this six year period was -9 percent. In 2012, GE stashed $108 billion in offshore tax havens to avoid paying income taxes. If this practice were outlawed, GE would have paid $37.8 billion in federal income taxes that year.”

Sanders on GE’s outsourcing: “GE has been a leader in outsourcing decent paying jobs to China, Mexico and other low-wage countries.”

Sanders on Immelt’s compensation: “Mr. Immelt has a retirement account at General Electric worth an estimated $59 million and made $19 million in total compensation last year.”

And in the red corner, we have the Scrapper from Cincinnati, the Charging Chairman, the Jabbing Jouster of the “House that Jack Built”—Jeffrey Robert “Jeff” Immelt!

Immelt, in response to Sanders: “GE has been in business for 124 years, and we’ve never been a big hit with socialists. We create wealth and jobs, instead of just calling for them in speeches. We take risks, invest, innovate and produce in ways that today sustain 125,000 U.S. jobs. Our engineers innovate every day to build hardware and software solutions that meet real-world challenges. Our employees are proud of our company. I meet second- and third-generation employees whenever I travel across the country. I am one myself. Our suppliers and partners are proud of our company. Our communities are proud of our company. Our pride, history and hard work are real — the moral fabric of America.”

Round 1 Analysis: Ooh—going after the socialism angle—low blow, Jeff! Sanders’ charge that GE doesn’t pay any taxes has been judged to be somewhat overblown. According to this piece from Megan McArdle in The Atlantic, General Electric does, in fact, pay estimated taxes, though it may be hard to prove based on the wealth of information the company’s financial returns entail. Meanwhile, this post from David Cay Johnston of Reuters argues that General Electric has actually been paying higher taxes outside the U.S., and as such, something other than tax policy is driving the company’s multinational business strategy, though Johnston does note GE pays an awful lot of people an awful lot of money to lobby Congress with respect to corporate tax law. Then again, this confusing back-and-forth review penned by Henry Blodget for Business Insider, which navigates opposing accounts of the firm’s tax bill from New York Times editor Bill Keller and GE’s own Public Affairs department, suggests the latter may just be full of spin, to put it mildly.

Hmm, some punches have been thrown, but no knockouts. Let’s go to Round 2 and see what the action holds for us.

“Sure, we have no problem following tax laws. That’s why we spend tons of money trying to rewrite them!” (Image retrieved from

Round 2: Bernie Sanders vs. Lowell C. McAdam, Verizon Communications CEO

In the blue corner, once more, we have Bernie “Feel the Bern” Sanders! Folks, how is this septuagenarian doing it? He’s got spunk! He’s got moxie! He’s got—dare I say it—chutzpah! His fury at corporate greed is fueling his desire to fight!

Sanders, on Verizon’s taxes: Verizon, “in a given year has not paid a nickel of taxes.”

Sanders, on not doing enough for America: Verizon is not investing in American communities, particularly in the “inner cities.”

Sanders, on the conditions leading to the strike: According to Sanders, Verizon had been threatening to ship jobs overseas for those workers who did not agree to pay cuts and/or reduced benefits.

And now, in the red corner, at the spritely young age of 62, the Brawler from Buffalo, the Cornell Crusher, he believes that “better matters” and that, if you step to him, you better not miss—Lowell “The ‘C’ Stands for ‘Come at Me, Bro'” McAdam!

McAdam, on Verizon’s taxes: “His first accusation – that Verizon doesn’t pay its fair share of taxes – is just plain wrong. As our financial statements clearly show, we’ve paid more than $15.6 billion in taxes over the last two years – that’s a 35% tax rate in 2015, for anyone who’s counting.”

McAdam, on using its profits to benefit America: “In the last two years, Verizon has invested some $35 billion in infrastructure — virtually all of it in the U.S. — and paid out more than $16 billion in dividends to the millions of average Americans who invest in our stock.”

McAdam, on jobs at Verizon: “Sen. Sanders speaks of a ‘moral economy’ for America – one that respects and maintains the dignity inherent in good, middle-class jobs. He seems to think that can only happen by ignoring the transformational forces reshaping the communications industry. But nostalgia for the rotary phone era won’t save American jobs, any more than ignoring the global forces reshaping the auto industry saved the Detroit auto makers.”

Round 2 Analysis: Lowell McAdam takes Bernie Sanders’ criticisms very seriously, suggesting the Vermont senator and his rhetoric were “disconnected from reality.” Ouch. That’s a body blow, and one not unlike others leveled at him and his campaign. Once more, the judges have found that Sanders swings and misses when it comes to the claim that his target does not pay its taxes. This side-by-side analysis by David Goldman of CNN—which certainly hasn’t been biased against Sanders or anything like that this election cycle—claims that Bernie’s contention may be based on one year in particular in which Verizon paid a negative effective rate, but that this much is unclear, if not outmoded thinking. On the count of investment in America, Goldman sees Sanders’ argument as more credible; McAdam’s pointing out that Verizon has invested millions in infrastructure implies some sort of altruistic reason for this behavior, but this is the cost of doing business for them, and moreover, the telecommunications company has been criticized by people not named Bernie Sanders for being slow to expand its high-speed Internet outside of more affluent neighborhoods.

As for the whole labor dispute thing, Goldman doesn’t really take sides, but does note how Verizon has outsourced some 5,000 jobs to countries like the Dominican Republic, Mexico and the Philippines. Also, um, workers generally don’t strike without reason. For all his boasts about the company he heads, McAdam seems particularly tone-deaf on this issue, a notion supported by his annual salary which netted him about $18 million in 2015. The strike, of course, has since been ended by an agreement between the two parties, and while some provisions of the accord favor the corporation, particularly in the area of offering buyouts to employees, by and large, Verizon was deemed to be conceding on a number of key points, including job creation, pay raises, and pension cuts. In the end, disaster was avoided, but this battle presages other labor disputes which stand to erupt over bargaining power struggles between labor unions and top management. We’re going to need to go to a decisive third round.

“Verizon employees should stop complaining about their pay and benefits. I mean, I only got $18 million in compensation last year, for Christ’s sake!” (Image Source: Verizon)

Round 3: Bernie Sanders vs. Robert Alan “Bob” Iger, Walt Disney Company CEO

In the blue corner, battered and bruised but not broken, fighting establishment politics at every turn and still standing, he could really use some of that single-payer healthcare right about now but he’s not throwing in the towel—yes, it’s Bernie Sanders!

Sanders, on Disney’s pay for its workers: “Anybody make a living wage working for Disney? It’s an example of what we’re talking about when we talk about a rigged economy. Disney pays its workers wages that are so low that many of them are forced to live in motels because they cannot afford a decent place to live.”

Sanders, on Disney’s overseas jobs and production: “It would be very nice of the Disney corporation to start building factories in the United States.”

And now in the red corner, rounding out our CEO trio, the Nasty New Yorker, the Mickey Mouse Marauder, the Jew with the Ol’ One-Two—Bob Iger!

Iger, on, well, Sanders himself: “To Bernie Sanders: We created 11,000 new jobs at Disneyland in the past decade, and our company has created 18,000 in the U.S. in the last five years. How many jobs have you created? What have you contributed to the U.S. economy?”

Round 3 Analysis: Wow—look at the Disney CEO going for Sen. Sanders with the haymaker! Unfortunately, it doesn’t really connect on Bernie’s big issue—that the Walt Disney Company doesn’t pay its employees enough. As with McAdam before him, if Iger’s compensation is any indication (upwards of $45 million), his company has the means to pony up for those who receive a Disney paycheck. Either way, it’s not really Bernie’s job to create jobs, so Bob Iger’s criticism comes off as a hollow defense of Disney’s wages. Or as Dan Van Winkle of The Mary Sue put it in the headline of a report on the Sanders/Iger war of words, “Disney CEO Bob Iger Responds to Bernie Sanders’ Criticism Like a Petulant Child.”

“You’ve got organized labor in your corner, Bernie? Well, I’ve got Mickey f**king Mouse in mine! So suck on that, asshole!” (Photo Source: Gene Duncan/AP Photo/Disney)

Hmm, Bernie has seemingly held his own against three separate bigwig CEOs. Might this fight’s judges actually rule in his favor? With no TKO in this bout, we’ll have to sweat out the results and let them decide. OK, the final tallies are in. In a unanimous decision, the winner and still Heavyweight Champion—soulless corporations! And the crowd goes wild! AAAAAAAAAAAHHHHHHHHHH!

But why did they win? Because they always f**king do, that’s why. In fact, I think we’re so used to corporate America winning we’ve become inured to it, or we like their products so much we rationalize that they can’t be that bad. General Electric makes those stainless steel kitchen appliances you like so much. Verizon gives you cable, Internet and phone service—not to mention disingenuous commercials with brightly-colored balls in them. And the Walt Disney Company lets you wish upon a star—as long as you don’t infringe on their intellectual property.

It’s OK that you like these things. You’re supposed to. As innovators, these companies do great work. But just because they make Pixar movies or smartphones or windmills doesn’t mean they’re above reproach. Bernie Sanders doesn’t always include the kind of specifics you’d like in his arguments against corporate greed, so his confrontational attitude toward highly-paid executives gets qualified as the ranting and raving of a bitter old man. I firmly believe, though, that GE wouldn’t hire an army of tax lawyers and specialists if they weren’t determined to pay less here in the United States, that Verizon employees wouldn’t just go on strike for shits and giggles, and that Disney has more than enough in its coffers to bump up wages and salaries just a little. For a form of organization in the corporation of which a major purpose is to limit personal liability, we should be more than just a little cautious of these businesses who exert so much influence in the financial and political worlds.

Bernie, you may not have won this contest, but the struggle continues for you and your supporters going forward. In a country in which moneyed interests have the upper hand, we, the people, may just have the last laugh.