For weeks there’s been intense debate regarding a proposed $3.5 trillion-dollar budget plan facing the U.S. Senate. Some Democrats say we should spend more. Others say we should spend less. For the most part, Republicans say no to the whole darn thing.
Politics are fun, are they not?
Surely, dollars matter. Anyone making the case that the United States is already too deep in debt to spend more has a legitimate leg to stand on — although many of those same folks didn’t flinch a bit when the national debt rose by nearly $7.8 trillion under former President Donald Trump. (Were those large corporate tax breaks really worth it?)
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Indeed, the nation is now $28.4 trillion in the hole — with the highest debt to GDP ratio since at least 2000. No doubt, this amount of debt is a problem and we will need to address it. But it’s not as simple as not spending in order to pay it down. If it were, we’d all be on board.
The trouble is that our nation has significant infrastructure issues that must be addressed now or it will cost us even more later. In this light, adding some additional debt to solve these issues might actually make fiscal sense.
Take, for example, climate change.
The science is abundantly clear that if we fail to address climate change, the costs to the U.S. will increase substantially over time. Many cost estimates land into the trillions. When you consider spending a few hundred billion on infrastructure now to prevent trillions later, this suddenly seems like an incredibly wise investment — even if it means driving up the national debt slightly further. In fact, one could easily argue we haven’t spent enough to date, and that we’re already paying more than was necessary.
Similar long-term benefits can be seen throughout the proposed bill.
Consider the billions set aside for universal pre-K ages 3 and up. At first it seems expensive and one might question the timing given our debt. Yet here again the research is quite clear that these are wise investments. Several studies estimate that for every public dollar spent on improving the early experiences of children, there’s a 7% to 13% return on investment annually. Setting aside the benefits to people, economically that’s a smart move.
Of course, we also care about the impacts to people, so if we’re considering not only the short-term health of our nation, but also the long-term, then incurring such debt might be wise. This is seen with other proposed policies such as paid family leave, child care and wildfire resources where the costs saved over time are worth the upfront debt.
On the other hand, there are a few proposals in the bill that should make us all pause.
For example, in a national debt crisis, lowering taxes for those making up to nearly half a million annually feels a bit … off. Especially given the extreme wealth disparities in America today, arguing for lower taxes on people making a quarter of a million dollars per year seems not only fiscally unwise but out of touch with most Americans. Arguing to lower taxes among the low and middle class, however, makes a lot of sense — as would drastically raising taxes on the top 1% and corporations.
Mostly, when it comes to spending and debt, I’m fascinated by how much of the discussion centers on a specific number — $1.5 trillion, $2.5 trillion, $3.5 trillion, $6 trillion — as if we’re deciding how much we want to add to the debt and only then considering what we can get for the price. But shouldn’t we equally focus on what programs are smart investments and let that help drive the decision?
I won’t suggest you should be thrilled about adding $3.5 trillion to the already bloated national debt. I’m not, either. But I will advocate for most of the programs in the bill that are smart investments, as well as suggest that we focus on the long-term value of the debt incurred as much as the short-term amount.
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