The assassination of Julius Caesar took place on the Ides of March, 44 B.C. It ended the career of Rome’s most famous general and began a civil war pitting together antagonists Marcus Brutus and Mark Anthony for control of the Roman Empire. On the Ides of March, 2017, the United States Treasury will face a debt ceiling fashioned by modern day antagonists Speaker John Boehner and President Barack Obama.
In August 2015, the GOP had threatened to block the transfer of funds from the Social Security Disability Insurance (SSDI) trust to cover an imminent shortfall in the main Social Security trust. To avoid a complete shutdown of the government, Speaker Boehner accepted a suspension of the debt ceiling for two years until March 15, 2017 at which time the debt ceiling would be pegged equal to the national debt on that date. The Ides has arrived and the outcome of this latest crisis is likely to result in a bitterly waged war between the GOP and the Democratic Party to determine a new debt ceiling.
During the 8 years of his administration, Obama doubled the national debt from $10 trillion to $20 trillion which is more debt than all previous 43 Presidents combined; it now stands at 106% of the Gross Domestic Product, a debt so large that it is now intractable.
Social programs currently consume 63% of total federal spending and 163 million citizens now receive some financial payment from the government. If this debt were to be divided equally, each citizen of the U.S. would owe $61,494; if the debt were to be allocated among taxpayers only, the burden for each would be $166,570. These numbers pertain to the National Debt; if Social Security, Medicare and U.S. Federal Budget Deficit debt are totaled, the unfunded liabilities (GAAP) amount to $105 trillion.
As of March 7, 2017, the total National Debt reached $19,964,000,424,457. For all practical purposes it will exceed $20 trillion on the Ides of March, 2017. At that time, it is estimated that the Treasury will have approximately $300 billion in cash remaining with which to pay current bills. Since the government spends approximately $75 billion per week, this remaining cash will be depleted within 4-5 weeks. Without an additional increase in the debt ceiling, the United States will face a default on its obligations. The United States has never defaulted on its obligations, except during the War of 1812 when Washington D.C. and the Treasury building were burned. It came very close in 2011 when the credit rating of the United States was downgraded resulting in a sharp decline in the stock market and an increase in interest rates.
President Trump has pledged that he will not cut any social entitlements (Soc. Security, Medicare, Medicaid) to curtail spending. He has already budgeted cuts in the EPA and the State Department and there is some talk about reductions in the Departments of Agriculture (farm subsidies), Education, Housing and Urban Development, Interior, as well as the National Endowment for the Arts. But even with substantial cuts in all these areas, it is highly unlikely that he will be able to eliminate the need for an increase in the debt ceiling and still implement important parts of his economic strategy.
Barack Obama has strewn a carpet of landmines in the path of this President, not the least of which is the enormous unresolvable National Debt. It is almost predictable that these fiscal miseries will be laid on Trump’s doorstep. Et tu, Brute.
Donald Trump faces a formidable task in righting this ship of state.