To accurately diagnose a problem, the source of its creation must be fully identified in order to avoid wasting efforts on treating secondary symptoms. The current economic reality in the United States is a perfect example of what happens when this practical approach is abandoned. Whether by design or intellectual decline, there has never been less attention paid to the causal factors of long-term financial debt with which most Americans find themselves saddled. Political theater has never been more effective at dividing the public into partisan echo chambers of superficial talking points to ensure that causal factors of economic degradation continue to go unnoticed.
The 21st century provides evidence of this, beginning with George W. Bush’s eight years in office that saw the national debt explode from $5.6 trillion in 2000 to $10 trillion in 2008. Attributed in large part to the post-9/11 “War on Terror,” the Bush Administration’s record spending was concluded with stimulus checks in March 2008 cutting Main Street in on the currency creation action that had mostly favored Wall Street.
Bush’s two-term successor, Barack Obama, oversaw the 2008 financial crisis that set a new precedent of unapologetic subsidies funneled to corrupt financial institutions that had failed as a result of their own lack of ethical business practices and impotent regulatory oversight. After taxpayers footed that bill, stimulus checks went out in March 2009 to appease the 2008 financial frustration, continuing the trend from the previous administration of putting the bureaucracy that had failed to prevent a problem in charge of coming up with its solution.
Fast-forward to our present “new normal” and we see the same old tactics with a novel twist, as bureaucrats used the pandemic to deem certain businesses “non-essential” for the first time in history and forcibly close them. This created instant financial desperation that was quickly seized upon by the government’s Paycheck Protection Program (PPP) loans exacerbating the already substantial debt levels faced by many individuals and small business owners.
These loans were deemed “forgivable” if the receiving business followed the required health mandates and spending protocols, but an unforeseen tax liability is now being realized that may negate the benefits promised by the politicians who passed the bill. The PPP was part of the March 2020 CARES act signed by the Trump Administration for $2 trillion in aid, including stimulus checks. Another round of stimulus checks went out under Trump in December 2020 as a supplement to the CARES act.
After the 2020 election flipped the coin back to blue, the Biden Administration signed the American Rescue Plan Act (ARPA) in March 2021 for $1.9 trillion including yet another round of stimulus checks to individuals. Currently, another $2 trillion infrastructure spending bill that includes higher taxes on businesses and corporations to cover the costs is being finalized. Additionally, there is a tax plan in negotiation to raise $1.5 trillion over a decade by taxing the highest earners, according to the White House.
When we analyze the pattern of this stimulus spending behavior, it is impossible to ignore the trend that has led to the national debt increasing five-fold in 20 years, with bipartisan support, as the trans-generational household debt hits all-time highs. “Beware the Ides of March” is a phrase that comes to mind when considering the sequence of events that saw a Bush to Obama regime change with back-to-back stimulus bills and now a Trump to Biden transition falling right in line with the same pattern.
There must come a time when the public acknowledges that the system consistently empowers leaders on both sides who routinely fail to prevent problems and then consistently offer solutions that are far worse in the long run for everyone. We can now measure the results of these policies: In 2020, individuals hit historic highs in household debt while 32 of the world’s largest companies recently saw their profits jump by $109 billion, as the “nonessential” were shuttered.
Meanwhile, the U.S. deficit just hit an all-time high of $1.7 trillion. The lack of interest in understanding the cause of financial problems in the United States may be a byproduct of distraction, but the result is a lack of accountability for the powerful who then create one-sided solutions with a proven track record of piling on more and more debt.
The economic stimulus approach utilized by the U.S. government does not address the actual causes of the financial problems it is attempting to solve because, in far too many cases, those causes are its own creation. The economic turmoil created in the name of COVID-19 can be tied directly to the unilateral government policies that robbed individuals of their freedoms to make choices regarding their own livelihoods. The damage certainly cannot be rectified by throwing more debt-ridden stimulus to the masses. That is akin to putting a BandAid on an ax wound. Until we redirect that ax to strike at the root of our financial problems instead of trimming branches or coming back on the people, the tree of tyranny will never fall.