Open Letter to Mr. Kudlow
The Honorable Lawrence Kudlow
Director of the National Economic Council
Room 235
Eisenhower Executive Office Building
Washington DC 20502
August 20, 2018
Dear Mr. Kudlow,
I am writing this letter because I have serious concerns about the economic future of our Republic. The reasons for my concern are the rising level of our national debt and also the ballooning cost of interest on that debt. According to my figures, the yearly interest on the debt will rise to at least $1.1T by FY 2029. Interest expense on the debt will rise to this level or higher because we will continue to deficit spend and because interest rates will continue to rise. Because our government is already deficit spending, every additional dollar we spend on interest will have to be borrowed. This will add hundreds of billions more to our yearly deficits and ultimately to our national debt, thus compounding the problem.
As I said above, interest rates are also rising which means every time there is a new sale of government debt, the interest on that debt will most likely be at a higher rate. The combination of more debt and higher interest rates will cause the debt level of the country to swell at an increasing rate.
As if that alone wasn’t enough, we are also faced with the issue of entitlement spending. Entitlements account for roughly two-thirds of the federal budget. The problem, as I see it, is that if entitlement spending increases by a modest 2% per year for the next ten years, our government will need an additional $500B to $600B per year to cover the additional cost. Also, the fact that the outlays for both the Social Security Trust Fund and The Medicare Trust Fund are greater than the revenue taken in means that eventually money will need to be borrowed to keep these funds solvent.
Obviously, the country is in a dangerous situation. It is dangerous to those of us that who are retired and receive these benefits, and it is also a serious national security threat. The worst part, however, is that America did this to itself. Those who we elected to represent us in Congress have failed miserably. They have put political expediency ahead of what was best for the country. They have basically run this country almost into the ground. The sad reality now is that we are in this hole and there is no political will to get us out of it.
The fact that the American taxpayers will be paying at least $1.1T in interest on our national debt is an abomination. The self-serving politicians who borrowed and squandered this money, most of whom were liberals, will probably never be held accountable, and will likely be reelected. This will be the result of the mainstream, left-leaning media’s burying of this pending disaster. The media will also continue to give cover to the left-leaning politicians who, in an effort to get reelected, have squandered billions upon billions of taxpayer dollars (trillions is probably more accurate).
My guess is that these left-leaning media outlets will be somewhat successful in their efforts to either bury this type of information or at least spin it in a more favorable light. It is fairly common knowledge that 20–30% of Americans are of the liberal persuasion. That being true, it is not a big stretch that many of these people, especially the foaming-at-the-mouth ones, would be very open to this type of left-wing narrative. Another reason is that many of these same people are totally ignorant of economic reality: for example, and this is probably hard for you to believe, but many of the people who I referred to above believe that the United States government has unlimited financial resources. I also think that some of these same people are presently serving in Congress.
In my view, we don’t have a lot of options. We need to either cut spending or raise taxes (which might do more harm than good) – or do both. Whatever decision is made, it better be made quickly. The one thing the country has going for it right now is a strong and growing economy. That will mitigate some of this additional expense, but it will not get us out of this hole by itself. The additional revenue coupled with spending cuts and possibly a small tax increase will be necessary to get back into the world of fiscal reality.
To be honest, Mr. Kudlow, I am not the least bit optimistic. There is no political will to get this done. The desire of members of both the House and the Senate to be reelected has become paramount to doing their jobs. This has become quite obvious with the latest craze of politicians offering “free stuff” to their constituents in order to get reelected. This practice is tantamount to legal bribery at the poles. It is this, the free stuff, and the rampant ignorance and apathy of a significant part of our electorate that will ultimately lead to our undoing.
I saw Tom Coburn, the former Senator from Oklahoma, being interviewed on TV last night. One of his comments was that in five years our budget will be reduced to two lines which will be interest and entitlements. That comment might be a bit of an overstatement, but I don’t think he’s that far off. Before hearing his thoughts on the country’s situation, I thought that I had a bleak outlook. The fact is that we are running out of time and options. The numbers don’t lie. Without decisive and painful action (yes, there will be pain), I see a bleak future for the US.
By the way, I was glad to hear that your health is recovering and that you are back to work. I don’t envy you your job. You have a lot on your plate. Good luck.
My sincere best wishes,
Carmen A. Porreca
14 North Church Lane
Queensbury, NY 12804