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Viewpoints: Chronic deficits in money, jobs and public trust have dogged the nation for decades

By Patrick Reddy

“When we got into office, the thing that surprised me most was to find that things were just as bad as we’d been saying they were.”

– President Kennedy shortly after taking office in 1961

Shortly before the 2004 election, Steve Chapman of the Chicago Tribune compared the severe challenges facing the next president – from the war in Iraq to record-breaking budget deficits – to “building a sailboat on the beach in the middle of a hurricane.” President George W. Bush narrowly defeated John Kerry and went on to have a troubled second term. Well, the job hasn’t gotten any easier.

Regardless of who won the last election, any president will face three huge shortfalls: 1) in both government and private finances; 2) in stubbornly high “industrial” unemployment; and 3) in sharp public doubts over whether our problems can be solved.

In 1973, the Gallup Poll first began to ask Americans if they thought the nation was on the right or wrong track. After the stalemate of the Vietnam War, numerous anti-war demonstrations and race riots, a majority of Americans told Gallup that the country was on the wrong track. That trend would continue for the rest of the decade. With Watergate, stagflation (a combination of unemployment and inflation), the energy crisis and rising crime rates and drug abuse, it was perfectly logical for the majority to say things were going wrong.

For example: In 1960, there 200,000 felons in prison. Today, that number is over 2 million, an increase of more than 1,000 percent when the population hasn’t even increased by 100 percent. And the pessimism would largely continue for the next four decades. With just a few exceptions, a majority of Americans have told Gallup that the country has been on the wrong track.

The three exceptions were the patriotic surge that followed the successful Los Angeles Olympics in the summer of 1984 and President Ronald Reagan’s “Morning in America” ad that peaked with 69 percent saying things were going well. It lasted until the Iran-Contra scandal in the fall of 1986.

The second was during the high-tech boom from 1997 to 1999, when a peak of 70 percent said the country was on the right track. It ended with President Bill Clinton’s impeachment trial and the election brawl of 2000.

After 9/11 with the rally-round-the-flag effect, a peak of 70 percent again said the country was going in the right direction, a mood that quickly dissipated when Bush invaded Iraq.

So, for roughly 45 of the last 50 years, the American people have intuited that something was wrong with society. As we shall see, that intuition had much basis in fact. Basically, the country lost its social balance in the late 1960s and its economic balance in the early 1970s. Since then, the “sweet seasons” of American life have been rare.

Rising red ink: The budget deficit is the most obvious problem. As President Trump has repeatedly said, the total national debt is now over $20 trillion, which is about 20 percent higher than the nation’s annual income. After peaking at a record annual figure of over $1 trillion per year for 2009 through 2012, the current federal deficit will likely be between $500 billion and $600 billion until 2020. With more baby boomers retiring every year until the 2030s, federal spending via Social Security and Medicare will rise automatically. The accumulated national debt is now roughly equal to $65,000 per person. Annual interest payments on the national debt are now roughly $250 billion.

If interest rates keep rising, as expected, interest costs will grow. The Congressional Budget Office recently estimated that annual interest costs on the national debt will rise by nearly $500 billion in the next decade, money that is essentially wasted. The interest payments on the national debt are projected to grow faster than the net national income for the next five years, not exactly a formula for success.

Nor is debt limited to the public sector. CNBC recently reported that total private sector debts may be double the $20 trillion national debt. In short, our fiscal position is very precarious. And an unexpected event (another war) that triggered a recession would reduce tax receipts and increase spending on unemployment programs, thus causing debt to spiral out of control.

Jobs shortage: This problem can also be measured. The Labor Department reports national unemployment every month by dividing the number of Americans with jobs by the total “labor force” of roughly 160 million. That’s known as “Unemployment-3” (U-3) or the “headline number” that the media reports. In March, the official rate was 4.5 percent, which sounds like nearly full employment. But there is much more to the story. The Labor Department reports that there’s another roughly 7 million workers who want a full-time job, but have either had their hours greatly reduced or are too discouraged to have looked for a job in the last year. That figure, known as U-6, was 8.9 percent in March, or nearly twice as high as the “headline” rate.

But there’s more. Economist John Williams asserts that the real number of unemployed is over 20 million. The Labor Department’s methods specify that if a worker fails to find a job after a year, he is seen to have “dropped out of the labor force.” Therefore, if a steelworker in Buffalo loses his job because the plant has closed, a year later he still won’t have a job, but the federal government no longer counts him as “unemployed.” Williams is correct: The Department of Labor’s own website shows that there are over 10 million “out of the workforce” men ages 25 to 54 (the prime working ages) who haven’t worked in the last year on top of the 10 million who are “unemployed and still in the workforce.”

In light of nearly 20 million men chronically unemployed, it’s no surprise that male wages adjusted for inflation are lower than they were in 1973, just as the energy crisis was hitting.

So, when Trump complained in the industrial heartland about a “jobs crisis,” he was statistically correct. Trump’s famous line to the unemployed was: “What have you got to lose?” And several million normally Democratic blue-collar workers supported him in 2016, thus allowing Trump to win crucial swing states like Pennsylvania, Ohio, Michigan and Wisconsin – and the election.

Lack of faith: Not surprisingly, the difficulties described above have taken their toll on traditional American optimism. Since 1964, the University of Michigan Survey has asked voters: “How much of the time do you think you can trust government in Washington to do what is right – just about always, most of the time or only some of the time?” In 1964, perhaps the post-war height of optimism, 76 percent thought the government would do the right thing “just about always” or “most of the time.” By 1980, after the body politic had been severely injured by Vietnam, Watergate and the turmoil of the ’60s and ’70s, that figure hit a record low of just 25 percent picking “just about always” or “most of the time.” In every election since 1973, a majority of voters have said either “some of the time” or “never.” Voters more than ever want problems solved – but have little trust in government’s ability to do so.

Since the ’70s, every additional dollar of income for families has come from wives working. So, families have had to work harder than ever to maintain a middle-class standard of living. True, most everyone has more consumer goods today – TVs, cellphones, etc. – but they’ve largely been bought with borrowed money.

Digging deeper, the most recent Harris Poll found that the vast majority of Americans were happy with their family lives and local communities, but expressed negative feelings about “the morals and values of Americans in general” and the state of the economy. And of course, many social problems like divorce, addiction and crime are driven by economics.

However, since I live close to Hollywood, where it is almost unconstitutional to have unhappy endings, I must conclude on a mildly positive note. Sharp technological advances have led to vast improvements in computers, cars, medicine and entertainment, trends that I’ll gladly elaborate on in a future article.

Patrick Reddy is a Democratic political consultant from California and author of the coming “21st Century America.”

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