The Daily BS • Bo Snerdley Cuts Through It!

Get my Daily BS twice-a-day news stack directly to your email.


Dems, Republicans far apart on soaring U.S. debt: I&I/TIPP Poll

by

The perennial dance between the president and Congress over the budget and raising America’s debt ceiling is a widely reported, but much-ignored, event. This time around it shouldn’t be. Even as our national debt soars, Americans are split over how serious the problem is, the latest I&I/TIPP Poll shows. Meanwhile, a government shutdown, or even possibly default, looms.

At last official count, federal debt totaled about $31.5 trillion. Looked at from a different perspective, $31.5 trillion means each American household is now responsible for roughly $237,500 in U.S. debt.

And it’s getting bigger fast, posing a threat to both the economy and to the financial system. If Congress and President Joe Biden can’t make a deal soon, a government shutdown, or worse, possible default, loom.

How does the public feel about this? The online I&I/TIPP Poll for April, taken from March 29-31 from 1,365 Americans across the country, asked the following question: “Some say that the debt is not sustainable. Others say that the debt is manageable relative to the size of the American economy. Which is closer to your viewpoint?”

Overall, voters saying the debt is “not sustainable” totaled 48%, a plurality, compared to those who called the debt “manageable relative to the size of the economy” at 35%. (The poll’s margin of error is +/-2.8 percentage points.)

Dems, Republicans Far Apart On Soaring U.S. Debt: I&I/TIPP Poll

The political breakdown, however, is telling and perhaps explains why the debt debate each year gets more and more divisive and angry: Republicans (74%) and independents (50%) overwhelmingly call the debt unsustainable, compared to Democrats at just 32%. Only 14% of Republicans and 28% of independents call the debt “manageable,” versus 51% of Democrats who do.

Dems, Republicans Far Apart On Soaring U.S. Debt: I&I/TIPP Poll

This huge split between Democrats on one side, and Republicans and independents on the other, will make it hard to forge a deal satisfactory to both sides. Failure to do so risks a financial cataclysm.

Other splits show up in the data. Those age 18-24 (43% vs. 43%) and 25-44 (37% vs. 50%) are least likely to say the debt is “not sustainable” vs. “manageable,” while those age 45-64 (56% vs. 24%) and 65+ (54% vs. 21%) are above average in their concern.

Dems, Republicans Far Apart On Soaring U.S. Debt: I&I/TIPP Poll

Women (50% vs. 25%) are higher in concern than men (46% vs. 44%), and whites (54% vs. 29%) than blacks and Hispanics (34% to 48%).

The point is, given such sizable splits among key electoral demographics, what can be done? On Jan. 19, the debt ceiling was hit, meaning the government has had to play a kind of fiscal shell game to pay its bills.

Talks, though tentative, have already begun.

House Republicans, negotiating with the Biden administration, have put forward a plan to temporarily raise the debt ceiling until May of next year. In exchange for avoiding a possible federal default, they seek caps on federal spending,

“The GOP proposal would call for a cap on either non-defense discretionary spending or overall discretionary spending after paring the federal budget back to 2022 levels,” the Washington Times reported last week.

“The proposal would also claw back unspent COVID-19 funds, block President Biden’s student loan forgiveness plan that is currently tied up in a Supreme Court battle, institute work requirements for social welfare programs and implement the Republican plan to lower energy costs, which passed the House but is expected to languish in the Senate,” the report said.

Will that pass muster with the Biden administration? It doesn’t look like it. The last time Biden and House Speaker Kevin McCarthy met over the debt was in February.

And the White House position has always been: No preconditions. Just raise the debt ceiling.

Fresh from his April 11-14 trip to Ireland, Biden had this to say when asked if he would talk to McCarthy:

“Of course, I’ll speak to him. Show me his budget,” Biden told reporters. “That old expression — ‘show me your budget.’ You know, he — we agreed early on, I’d lay down a budget, which I did on March 9th, and he’d lay down a budget.”

“I don’t know what we’re negotiating if I don’t know what they want,” Biden added.

Sunday was the deadline for Congress to agree on a new budget. For the 20th year in a row, it failed in that responsibility. No surprise there, since the Senate is controlled by the Democrats, and the House by Republicans, who remain far apart in their priorities.

What should be done?

A nonpartisan group of 434 economists, from universities, think tanks and public policy organizations across the country last week issued an urgent message to both Democrats and Republicans in Congress about Biden’s proposed budget, which the group called “unsustainable”:

The Biden Administration believes the solution to America’s economic woes is more federal spending and higher taxes. Having increased federal spending by nearly $5 trillion in its first two years, the Biden administration now proposes additional tax and spending increases totaling $4.7 trillion and $1.9 trillion, respectively.

We urge Congress to reject President Biden’s irresponsible budget proposal and work together to address the country’s short-term needs while also committing itself to take steps toward reducing the federal government’s unsustainable and dangerous fiscal imbalances.

Meanwhile, White House assertions that it will actually cut deficits over the next decade by $3 trillion have been roundly criticized by budget hawks. In fact, projections from the nonpartisan Congressional Budget Office show annual deficits growing from $1.4 trillion this year to $2.7 trillion in 2033, while as a result total federal debt will soar from $32.4 trillion at the end of this year to $52 trillion in 2033.

The IMF’s Fiscal Affairs Director Vitor Gaspar recently told Yahoo Finance that it is clear “that from the viewpoint of medium- and long-term prospects, there is a very strong case for fiscal adjustment in the U.S.”

Of greater concern is what would happen if foreign holders of U.S. government debt suddenly get spooked and start to sell their holdings of U.S. securities.

Officially, foreign treasuries and investors own about $7.6 trillion of U.S. government debt. Bad news here, such as a default on U.S. debt this summer, could spark a run on the dollar and cause interest rates to surge, sending a recessionary shock wave through the U.S. and global economies.

Recent deals among the Russians, Chinese and Saudis to create alternatives to the world’s dollar-based trade are already threatening the dollar’s preeminent position as the No. 1 global currency. A debt-panic might push the dollar to the brink, bringing inflation and perhaps eventually forcing the U.S. to do something it hasn’t had to since before World War II — pay some if not most of its bills in someone else’s currency, a huge disadvantage.

Americans’ complacency about our growing fiscal problems has so far not hurt us too badly. That might not always be the case, however.

I&I/TIPP publishes timely, unique, and informative data each month on topics of public interest. TIPP’s reputation for polling excellence comes from being the most accurate pollster for the past five presidential elections.

Terry Jones is an editor of Issues & Insights. His four decades of journalism experience include serving as national issues editor, economics editor, and editorial page editor for Investor’s Business Daily.

Hey, want to dig deeper? Download data from our store and pay what you can afford!

Like our insights? Show your support by becoming a paid subscriber!

Want to show your appreciation? Donate

TIPP Picks

Must Watch/Read – Selected by tippinsights Editorial Board

The Great Divorce? 2.6 Million Fled Counties That Voted For Biden
Is the country separating itself into two distinct camps? One increasingly leftist and the other trying desperately to cling to traditional American values? Census data seem to show that it very well could be underway. Last week, we commented on recent population data showing that people have been…
Dems, Republicans Far Apart On Soaring U.S. Debt: I&I/TIPP Poll

 

Speak Your Truth: Don’t Let The Government Criminalize Free Speech
By John & Nisha Whitehead, The Rutherford Institute, April 19, 2023 “If freedom of speech is taken away, then dumb and silent we may be led, like sheep to the slaughter.”—George Washington What the police state wants is a silent, compliant, oblivious citizenry. What the First Amendment affirms is…
Dems, Republicans Far Apart On Soaring U.S. Debt: I&I/TIPP Poll

 

IRS Whistleblower Alleges ‘Conflicts Of Interest’ In Biden DOJ’s Investigation Of Hunter
By John Hugh DeMastri for the Daily Caller Foundation An Internal Revenue Service (IRS) whistleblower has reportedly told Congress that the Biden administration’s ongoing investigation into Hunter Biden’s taxes are mired with “clear conflicts of interest,” according to a letter obtained by both The…
Dems, Republicans Far Apart On Soaring U.S. Debt: I&I/TIPP Poll

 

China Dominates EV Market As Biden Pushes To Phase Out Combustion Engine
By John Hugh DeMastri for the Daily Caller Foundation Chinese electric vehicle (EV) makers continue to grow faster than their European and U.S. competitors in 2023, even as the Biden administration pushes rules that could eventually end the sale of gas-powered vehicles, according to Semafor. Chine…
Dems, Republicans Far Apart On Soaring U.S. Debt: I&I/TIPP Poll

 

Unpopular Cost Of Coronation: Infographics
Around half of Britons do not think taxpayers should fund the coronation, a YouGov poll suggests, even though King Charles’s enthronement will be on a smaller scale than his predecessors. The coronation occurs amid a cost-of-living crisis and public-sector strikes in the UK. The YouGov poll found o…
Dems, Republicans Far Apart On Soaring U.S. Debt: I&I/TIPP Poll

 

TIPP Takes

Geopolitics And Geoeconomics

#1. U.S. Pledges $325 Mln In Weapons Ahead Of Ukraine’s Offensive – Al Arabiya

The package will be part of a Presidential Drawdown Authority, which means the weapons will be taken from the Pentagon’s stockpile instead of procurement from the private sector.

Dems, Republicans Far Apart On Soaring U.S. Debt: I&I/TIPP Poll

This is the thirty-sixth equipment drawdown from the U.S. Defense Department’s inventories since August 2021, bringing the total U.S. military aid to more than $35 billion.

Separately, Ukraine’s defense minister announced that U.S.-made Patriot air defense missile systems had arrived in Ukraine earlier. “Today, our beautiful Ukrainian sky becomes more secure because Patriot air defense systems have arrived in Ukraine,” Oleksii Reznikov tweeted.


#2. Russia’s Private Wagner Group Denies It Is Operating In Sudan – Reuters

“Due to the large number of inquiries from various foreign media about Sudan, most of which are provocative, we consider it necessary to inform everyone that Wagner staff have not been in Sudan for more than two years,” the group wrote on Telegram.

Dems, Republicans Far Apart On Soaring U.S. Debt: I&I/TIPP Poll

Wagner had not had contacts for a long time with either Sudan’s military ruler, General Abdel Fattah al-Burhan, or paramilitary chief General Mohamed Hamdan Dagalo, whose forces are at the heart of the current conflict, it said.

Western diplomats in Khartoum said in March 2022 that Wagner was involved in illicit gold mining in Sudan, among other activities. Sudan denied this was the case.


#3. Russia-Aligned Hackers Want To Hit West’s Infrastructure, Britain Says – UPI

Ideologically motivated hackers sympathetic to Russia and its invasion of Ukraine want to target the critical infrastructure of the democratic world, Britain’s cybersecurity agency warned.

Dems, Republicans Far Apart On Soaring U.S. Debt: I&I/TIPP Poll

The alert from Britain’s National Cyber Security Center did not identify specific about which Western countries and what critical infrastructure was being targeted. However, it said this “new class” of Russian hackers motivated not by financial gain but by ideology has emerged over the last 18 months.

Oliver Dowden, Britain’s Cabinet Office minister, described the threat as being “the cyber equivalent of the Wagner group.”


#4. U.S. Grounded Chinese Drones Despite Security Warnings – Al Jazeera

A U.S. government agency grounded its drone fleet over concerns China could use the unmanned aircraft for spying despite internal warnings that a ban would increase security risks.

Dems, Republicans Far Apart On Soaring U.S. Debt: I&I/TIPP Poll
China’s DJI is the world’s largest manufacturer of commercial drones [File: Kin Cheung/AP]

The U.S. Department of Interior (DOI) also disregarded warnings the ban could hamper efforts to fight wildfires months before officials reported the restrictions were making fire-fighting more difficult and dangerous, the documents show.

The DOI, which manages public lands and resources in the U.S., ordered the temporary grounding of drones made in China or containing Chinese parts in October 2019 amid deep suspicion of Chinese technology within the administration of former U.S. President Donald Trump.


#5. China Funds Flock To Hong Kong To Sate Mainland Investors – Reuters

Large China-based fund managers are setting up shop in Hong Kong for the first time, seeking to fill Chinese investors’ appetite for U.S. dollar-based products and international exposure after the country reopened its borders.

Dems, Republicans Far Apart On Soaring U.S. Debt: I&I/TIPP Poll

The foray by China-based funds into Hong Kong kicked off last year as China lifted years of COVID-19 lockdowns and as high net-worth Chinese families could finally travel and diversify investments in their hunt for stronger returns.

At least eight mainland-based funds, including billion-dollar yuan quant funds, equity funds, and mutual funds, have set up operations in Hong Kong in the past six months. According to a Reuters tally based on sources and public information, more than ten others are headed there.


#6. EU Mirrors U.S. With $47 Billion Package For Made-At-Home Microchips – UPI

The Chips Act, the same as parallel legislation passed in the United States, aims to increase Europe’s market share for semiconductors from 10% to 20% by the end of the decade.

Dems, Republicans Far Apart On Soaring U.S. Debt: I&I/TIPP Poll

The measure calls for some degree of self-sufficiency in semiconductors, backs large-scale innovation, and prepares the block for potential supply-side issues. The bloc said that semiconductors are central to a technological race with broad-based geopolitical ramifications.

Similar policies in the U.S. economy back a made-at-home technology sector for everything from the batteries needed to power electric vehicles to the microchips that run mobile phones.


#7. U.S. Imposes Sanctions On Network Of Suppliers For Iran’s Drone Program – RFE/RL

The U.S. has imposed sanctions on a network of companies and suppliers — mostly based in China — that the Treasury Department says support Iranian drone manufacturing.

Dems, Republicans Far Apart On Soaring U.S. Debt: I&I/TIPP Poll

The fresh sanctions are aimed at increasing pressure on Tehran to stop supplying drones to Russia, which has used them throughout its war in Ukraine, including for attacks on critical infrastructure supplying electricity and water to Ukrainian citizens.

The U.S. Treasury Department stated that the additional sanctions target one individual — Iranian national Mehdi Khoshghadam, managing director of Pardazan System Namad Arman (PASNA) — and six entities.


#8. Israel’s Netanyahu Warns Saudi Arabia Of ‘Misery’ With Iran After Recent Deal – Al Arabiya

Israel’s Prime Minister, Benjamin Netanyahu, said in an interview that Saudi Arabia struck a deal with Iran to end the Yemen war.

Dems, Republicans Far Apart On Soaring U.S. Debt: I&I/TIPP Poll

But he cautioned partnering with Iran. “Those who partner with Iran partner with misery. Look at Lebanon, look at Yemen, look at Syria, look at Iraq; these are countries that are almost on the failed states status,” Netanyahu commented. He added: “95 percent of the problems in the Middle East emanate from Iran.”

Netanyahu referred to the recent China-backed deal between Saudi Arabia and Iran to restore diplomatic and economic ties.


#9. Iranian Former Crown Prince’s ‘Historic’ Trip To Israel Courts Controversy – RFE/RL

Iran’s former crown prince, Reza Pahlavi, an exiled opposition figure who has lived in the United States for decades, arrived in Israel on April 17.

Dems, Republicans Far Apart On Soaring U.S. Debt: I&I/TIPP Poll
Reza Pahlavi, the eldest son of the last Shah of Iran, attends an event at the Yad Vashem Holocaust memorial museum in Jerusalem on April 17.

He held talks with senior officials, met Israelis of Iranian descent, and participated in Israel’s annual Holocaust memorial ceremony.

The 62-year-old Pahlavi described his visit to Israel as a chance to deliver a “message of friendship from the Iranian people.”

But some Iranians blasted Pahlavi for visiting a country that has threatened to launch military strikes against Iran. The former royal was also criticized for his silence on the plight of Palestinians.


#10. Japan Should Brace For Large “Ninth” Covid Wave: Experts – Kyodo News

A group of experts warned that Japan could face a large “ninth wave” of the coronavirus pandemic in the future, with the health minister noting a recent rise in cases of a new, contagious subvariant of the virus.

Dems, Republicans Far Apart On Soaring U.S. Debt: I&I/TIPP Poll

“A possibility remains that it will be larger than the eighth wave,” the experts said in an opinion presented at their meeting.

They also pointed out that due to the aging population, Japan may see its mortality rate remain high compared to other countries.


#11. Spain’s Drought A ‘National Concern,’ PM Says – D.W.

Spanish Prime Minister Pedro Sanchez told parliament that the government sees drought as “one of the central political and territorial debates of our country over the coming years.”

Dems, Republicans Far Apart On Soaring U.S. Debt: I&I/TIPP Poll

Last year was the hottest year on record for Spain — temperatures have risen by 1.3 degrees Celsius since the 1960s.

The autonomous region of Catalonia, which includes the city of Barcelona, is home to over 7.5 million people and could enter a drought “emergency” this September, according to Catalan authorities.

Figures from the UN have shown that Europe is warming faster than any other continent.


📧
We welcome readers’ letters via email. If your letter is published, you get to ask a question in the TIPP Poll for free.
Please email [email protected]

Republished with permission from TIPP Insights

Submit a Comment

Your email address will not be published. Required fields are marked *