During a 90-minute debate full of head shaking, rehearsed lines, and strategic attacks, scant time was dedicated to the issue that Americans care about most: the economy.
The masochist who decided to watch Double-A political theater rather than playoff baseball or to spend quality time with family and friends may have the impression that the most pressing economic issue of our time is the national debt. This, like much of what you hear in this year’s interminable election, is not true. If you ask most people, their incomes and financial prospects are far more important.
When moderator Elaine Quijano turned to the economy, she noted that neither campaign’s economic plan would reduce the $19 trillion national debt, and asked: “Are you concerned that adding more to the debt could be disastrous for the country?”
Indiana Gov. Mike Pence had the first crack at the question, and promptly expressed horror that the debt rose under President Barack Obama. Then he veered off into standard Republican talking points on lower taxes and fewer business regulations.
Virginia Sen. Tim Kaine delivered a canned zinger about Trump being a “you’re fired” presidential candidate, and then rattled off traditional Democratic policy proposals, such as increased infrastructure spending and reducing the burden of college student loans.
The conversation then devolved into a discussion of Donald Trump’s tax returns, punctuated with feigned incredulous chuckles and interruptions, until the topic of the economy was eschewed for Social Security and then foreign policy.
The honest answer, though, from both nominees would have been: “No, I’m not concerned, or at least, I’m more concerned about more pressing political matters.”
Truth on Debt
To be fair, $19 trillion sounds like of a lot of money. When politicians throw around that figure, who could blame you for wondering whether America was sinking into a deadly swamp of debt? After all, when people endure thousands of dollars in credit card IOUs or medical bills, it generally takes years of planning and sacrifice to get out of the red.
What you have to remember is that, no matter what a politician tells you, the government of the United States is not like a family.
The federal government can borrow money, in good times and bad, at reasonable interest rates, and refinance old bonds when the economy is ebbing and borrowing costs are lower.
The debt situation isn’t even as dire as the moderator made it sound. The total interest payments to service the national debt last year was just under $225 billion, compared to the nearly $3.2 trillion in total revenue collected by Washington. So the nation’s debt obligations amounted to just 7% of its income, down from 17% in 1995.
American debt, meanwhile, benefits American citizens. You probably invest in U.S. debt through a bond fund in your retirement fund. To put this in perspective, mutual funds hold more than $1 trillion in Treasury debt. That ballast in your portfolio has to come from somewhere.
Of course, runaway inflation through unabashed government borrowing would hurt people’s lives. But that’s nowhere near what is happening now.
In fact one of the main issues facing the Federal Reserve is that inflation, and wages, aren’t growing fast enough.
Moderators are better off asking about how much people earn versus how much the nation owes.