Well he should rest assured. We are running a deficit in excess of $3 trillion this year. No one – at least no one who’s setting policy – is worried about deficits.
And that suits Steve Mnuchin just fine. The man who’s supposedly in charge of protecting the integrity of the United States Treasury is instead urging the biggest borrowing blowout in the nation’s history – by a lot – and assuring anyone who will listen that this will all be just fine:
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If Mnuchin were to give an honest rationale for his position, it might sound something like this: No one in Washington is, or will ever be, concerned with how much debt we’re in. So let’s spend away! Wheeeeeeeee!
Instead, he actually attempts to make the case that all this new borrowing is fine because the Fed had not long ago shed some of its balance sheet. Some, perhaps, but nowhere near enough to clear the way for $3.3 trillion in new debt.
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Even more bizarre is Mnuchin’s claim that the economy is bouncing back because of all the government’s deficit spending. The stimulus checks, the unemployment bonuses and the PPP loans were handed out in the second quarter, when GDP tanked to the tune of 34.3 percent. It was the worst quarter in American history, as measured by quarter-over-quarter change.
The third quarter, which looks to be a commensurate rebound, has been fueled almost entirely by businesses reopening. As usual, it’s the private sector that juices growth while government bureaucrats sit around in Washington and imagine that they’re the ones responsible for it.
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Mnuchin is wrong. We do not need another stimulus. We do not need the $500 billion in additional debt the Republicans say they want. We certainly don’t need the $3.2 trillion in new debt (beyond the new debt we’ve already taken on this year) that Democrats want. We don’t need any of this.
What we need is for all sectors of the economy, everywhere, to fully reopen. That way the private sector can start producing the wealth that will be necessary to pay for Washington’s profligate spending. And we need to stop listening to Beltway denizens like Steve Mnuchin, who never thinks it’s time to care about deficits because it’s always some sort of emergency that can only be addressed by lots and lots of government spending – of money we have to borrow, because we decidedly don’t have it.
And if President Trump is inclined to make any changes to his cabinet should he win a second term, a new Treasury Secretary would be a great place to start.
