Our Money

Oct. 7, 2016

Let’s talk about debt. We have plenty of it on the national level and maybe not as much as we’ve been told on the local level.

The national debt is rapidly approaching a staggering $20 trillion. For those of you who enjoy zeroes, that would be $20,000,000,000,000. That’s our cumulative debt, the annual deficits stacked one atop the other until they’ve made a really big pile.

Our deficit, the amount our annual expenditures exceed our annual revenue, will be somewhere around $600 billion this fiscal year. It doesn’t require complicated mathematical wizardry to understand that’s unsustainable. Simple arithmetic should be enough, but those spending our money while pretending to represent us seem little moved.

Our presidential candidates have both outlined economic plans that demonstrate all manner of magical budget thinking.

Donald Trump proposed lower taxes for corporations and the very rich and the almost very rich while promising a dramatic increase in defense spending. He claims he will eliminate the debt in five years. He’s also publicly said, “I love debt,” and “I’m the king of debt,” neither of which sounds promising.

Hillary Clinton proposes tax increases for the very rich and almost very rich, expanding healthcare coverage, and reducing college student debt, among other things. She doesn’t talk much about debt or deficits.

The non-partisan Congressional Budget Office (CBO) has analyzed both proposals as best they could; neither plan is especially strong on specifics.

The CBO found the Trump proposal would increase the debt by trillions and annual deficits by hundreds of billions. Reducing revenues while increasing expenditures isn’t really a path to debt reduction.

The Clinton plan will increase the debt, according to the CBO, by hundreds of billions, and increase the annual deficits by billions. There simply aren’t enough rich people who can be taxed enough to pay for her plans.

The federal budget is an out-of-control monster gorging itself on debt. And it won’t be especially easy or painless reeling it back in, if that’s even possible.

The biggest chunk of our budget is wrapped up in just three basic areas: defense/homeland security (16.2 percent), Social Security (25.3 percent), and Medicare/Medicaid (28 percent). Much of that spending is considered mandatory, required by law.

That doesn’t leave much discretionary spending to cut.

Speaker of the House Paul Ryan had a plan that actually reduced the debt. So did a bipartisan commission appointed by President Obama. Erstwhile presidential candidate Rand Paul had a plan that eliminated the debt over the course of the next decade.

Nobody paid much attention to any of it. Privatizing Social Security and turning Medicare over to private insurers, as both Ryan and Paul proposed, were ideas welcomed by almost no one except Wall Street and big insurance companies, both of whom would reap billions from such changes.

Real debt and real deficits but no real answers from our esteemed national leaders.

Locally, we have a different problem altogether. Unlike the federal government, local governments are required to balance their budget every year.

Grand Traverse County has a pair of budget issues, the worst of which is a seriously underfunded pension system. The good news is it doesn’t have to be balanced by the end of the year. The bad news is that the deficit — somewhere between $51 million and $62 million, depending on who’s talking — does have to be paid down over time.

The annual budget is a different matter. We’ve been told there will be a $4.1 million structural deficit in the 2017 fiscal year. In other words, our expenditures will exceed our revenues by that amount. That would be a real problem.

That number has been repeated over and over again. The administrator and board used it as a cudgel to cut services, try to eliminate positions, and force employees to absorb a 300 percent increase in their share of healthcare costs. Candidates used the number in their campaign literature. It was bandied about in Lansing when county officials met with the Municipal Employee Retirement System (MERS).

Elected county officials, other than the board of supervisors, took a look at the numbers and wondered aloud why a projected deficit went from a few hundred thousand one year to several million the next.

County Treasurer Heidi Scheppe, who has some experience with budget numbers, thinks an accounting error was made, and the actual deficit is $671,000, not $4.1 million.

The county administrator, his assistant, and the board were remarkably cavalier when confronted with the discrepancy. Let those wanting a new audit pay for it, the administrator said.

We deserve better. The audit should be meticulously reviewed without additional expense and accurate numbers presented. If the original audit was wrong, we deserve an explanation and a plan for walking back some of the cuts based on it.

It’s our money, and our employees being impacted. At a minimum, we deserve an honest accounting.