The Greenfield Report with Henry R. Greenfield
Welcome to "The Greenfield Reportwith Henry R. Greenfield," where 50+ years of world travels across 10 countries shape insightful takes on current geopolitical events. Join Robert for eye-opening global reports with practical local solutions, and enjoy guest appearances offering fresh perspectives. Embark on a journey of understanding and lively discussion.
The Greenfield Report with Henry R. Greenfield
Episode 8- The $29 Trillion Question: Navigating the US Budget Deficit and National Debt
Could the United States be heading toward fiscal collapse? In this eye-opening episode, Henry R. Greenfield takes on America's growing budget deficit and national debt crisis, breaking down complex financial realities into stark, understandable terms.
The numbers are staggering: a $29 trillion national debt (98% of GDP), annual deficits exceeding $2 trillion, and interest payments alone approaching $1.8 trillion yearly. With Social Security projected to become insolvent in less than seven years and Medicare costs spiraling upward, our financial trajectory points toward potential economic catastrophe within 30 years if left unchecked.
Greenfield methodically dismantles popular misconceptions about easy fixes. Even if we eliminated every federal agency outside "the big three" spending categories—Social Security, Medicare/Medicaid, and defense—we'd still fall short of balancing the budget. The math simply doesn't work. Most Americans receive far more in Social Security benefits than they contributed, Medicare Part B remains largely unfunded through current revenue streams, and defense spending continues to approach $1 trillion annually.
Drawing on decades of international experience and expert economic analysis, Greenfield lays groundwork for understanding why America's fiscal problems require comprehensive solutions rather than simplistic cuts or partisan talking points. This episode serves as a crucial foundation for upcoming discussions on potential pathways forward—solutions that will demand political courage and honest conversation about both spending priorities and revenue needs.
Share this episode with friends, colleagues and especially your elected representatives. The future of America's economic stability may depend on our collective understanding of these fiscal realities.
Welcome to the Greenfield Report with Henry R Greenfield, your gateway to understanding today's geopolitical landscape. With 50 years of experience across 10 countries, henry shares expert insights on world affairs, offering practical solutions and engaging guest perspectives. Dive into the Greenfield Report for lively discussions on the issues that matter.
Speaker 2:US Budget Deficit Part 1. This is Henry R Greenfield for the Greenfield Report. I am often asked by listeners. While it is informative to point out some of the major issues, ranging from Trump's plans for Fortress America and changing the global economy, or the US withdrawal from Europe and possibly NATO and other rather thorny issues, it would be helpful to come up with some solutions to these and other really difficult problems that we and our children must face in the future. I thought about it and, as I'm a bit limited in my experience, I thought I would take on something easy which I would like to lay out today. So let's solve the US deficit and debt crisis, make it comprehensive and do it in less than 10 minutes. Okay, maybe it will take a bit more, but I think it can be done. A couple of caveats After listening. If you think it is helpful, please do share this with your friends, your colleagues and, most of all, your elected representatives. Secondly, on the solutions, don't blame me. Blame the experts who I've taken these suggestions from, along with my many years of working and living in lots of countries overseas.
Speaker 2:Okay, let's get started and we will begin by laying out this simple problem. First of all, the US allows deficits and debt to accumulate and over time it has grown to a gargantuan size. Some other countries like Germany which may change, by the way, so they can have more defense spending, does not allow an unbalanced budget. This may also be a legacy from way back to prior to Hitler, when the Weimar Republic had such a high debt and rampant inflation that people took money around in wheelbarrows to pay for their groceries. As for the US, the last time the US had a balanced budget was in the year 2000, when Bill Clinton left office. The debt at that time seemed to be enormous at $5.6 trillion. Seemed to be enormous at $5.6 trillion. However, today it is at $29 trillion and rising, which is at least 98% of the annual United States GDP of $30 trillion. And this cost is going up by $2 trillion or more a year, which, with the annual increase in interest rates you know inflation. Annual increase in interest rates, you know inflation means that now the interest is almost 1.8 trillion alone and rising Social security is the most expensive item in the budget. It is set to go insolvent in less than seven years as not enough people are paying in and everyone is taking out all 72 and a half million and counting. Medicare, they say, is out of control at several trillion per year. And when you add in the so-called transfer to states, which is Medicaid and other assistance, at $1.1 trillion, you have a total Medicare, medicaid transfers plus Social Security, of at least $3.5 trillion, perhaps $4 trillion per year. And then, finally, the other item which is supposedly discretionary is defense spending, which is also approaching $1 trillion a year. That means, no matter how you cut it, let's call it the big three, equals at least $4.5 to $5 trillion in a budget of $6.8 trillion. And don't forget those interest payments of $1.8 trillion. So there's not much left for all of those programs that Doge is talking about cutting.
Speaker 2:To make it worse, president Trump wants to extend the tax cuts, which will cost $4 trillion or more over the next 10 years. Then he has added on the no tax on tips or Social Security and some other goodies on tax cuts totaling another $2 trillion. If you add them up, it is around $8 trillion. And, to paraphrase an old saying by Senator Dirksen, a trillion here, a trillion there and before you know it you're talking about real money. I know, not very funny, but you get the picture Within a couple of years, no matter how you cut it, the debt will exceed the GDP of the United States and, as Trump is forecasting a recession, even if his remake of the global economy works, with tariffs on everything, it means, by next year the US will owe more than its entire economy. Economists call this being severely underwater, and recent economic modeling shows the United States economy collapsing within 30 years. So you could conclude there are great reasons to support President Trump and his proposed cuts and Doge and getting rid of all the bad agencies that are full of fraud and corruption.
Speaker 2:Right Sounds good, but the numbers don't work, as, no matter how many cuts Doge makes, none of it matters unless you start cutting the big three or find a way to fix them. And, of course, don't forget the interest payments. In case you were wondering. On top of that, the US has all sorts of other taxes. So while federal tax can go down, there are still state taxes, local taxes, excise taxes, sales taxes, taxes on gas and other things that you buy. Then there are President Trump's tariffs, which everyone agrees are a tax. Even Trump is now admitting there will be, according to him, some temporary pain or disruption, while all of the supposed benefits of tariffs kick in. That could add up, for instance, to up to $14,000 on some vehicles, and the used car market is taking off. Thus, trump will not get his revenues that way either. So if you want to fix things, where do you start? As they say, it is always best to start at the beginning, and we will take it one by one, and when we are done, you're going to see how easy it is to solve the deficit and the debt crisis.
Speaker 2:But first a couple of more points. I'm sorry to tell you, folks, but what you put into Social Security doesn't actually cover what you are taking out. I checked mine, as many others have, and found that while we may have started paying into Social Security as young as 16, within a few years after reaching 62, when people start collecting, they had long since taken out more than their employers had put in. And let's be honest, you can forget about my investing perfectly or anybody else in a privatized system, as everyone I know was way too busy trying to make ends meet to have invested those few hundred dollars long ago or even now, and we were way better off to let Social Security save it for us, to make sure it was there when we needed it Right Next ditto for Medicare. I didn't realize it, but all of those deductions we pay for Medicare, I found out we only pay for Medicare A and not Medicare B, where the vast majority of costs are, because that's where the seniors are. So we didn't pay for that either, and no one put money in for Medicaid or the other so-called transfer-to-state items. So the three biggest items Social Security and Medicare, medicaid we either didn't pay in enough or we paid nothing at all, and now we don't have enough people to keep Social Security afloat the way that it is going now.
Speaker 2:I also found out that rich people also can get the maximum because they paid more in and their companies also put more in and they also had those shares and options and their 401k is really big. So let's figure this out. They can get up to $60,000 or more for themselves and their wives, which means $120,000 for a couple, which is a lot compared to the average monthly Social Security payment of around $1,500 per month that tens of millions have to live on. And those top guys getting the big bucks at $60,000 a year get taxed at most 15% on their so-called long-term capital gains, which is part of the Trump tax law when they take it out, but many like myself are still working part-time as we need the money and our tax rate is actually higher because we don't have capital gains. Then I also learned that, contrary to my understanding, ironically upper middle class and rich people actually do pay tax, not zero like Bernie Sanders says. In fact, the top 20% pay about 90% of the federal income taxes taken in, and if they own a business, they pay taxes there too, but they get some deductions.
Speaker 2:Now this is looking very complicated and hard to figure out a way forward. To make matters more complicated, I looked it up and if all the wealth of all the billionaires went to taxes, it would only last eight or nine months or five, maximum six trillion in total, and then it would be gone and there would be no more money left in the stock market and my 401k, as one economist left and said, the stock market would collapse and with that money gone it would be called a 201k. No, not very funny, but there must be hope. Right Doge must be cutting the big stuff by now. Hey, when I heard Musk was visiting Secretary of Defense Hegseth you know the Signal Group chat guy I thought Eon, our working hero who works for free, by the way for us, according to what Trump says, would come up with some way to save maybe $100 billion or $200 billion or more out of that almost $1 trillion in defense, but no, unfortunately it didn't happen. Then I guess he was more interested in what was happening if we invaded China and then Musk had to protect his investments there. Will we get to use his satellites or do they go up in price too?
Speaker 2:Circling back, just to let you know, I have not forgotten speaking of Doge. So far, the total savings claimed are $55 billion, but have only been verified at $2 billion or in a multi-trillion dollar budget, not even a rounding error. And let's be honest, doge has introduced chaos and inefficiencies and court battles and walking away from contracts, feeding starving kids, so you cannot say anything, but it is a mess. So can Doge actually get the savings and if so, how much? I mean if they don't cut Social Security or Medicare, which Trump says is off the table, and defense so far has had no cuts. So let's add them up Social Security, medicare and defense. Let's see $4.5 to $5 trillion in a budget of $6.8 trillion, in a shortfall of $1.7 trillion or more If Musk cuts every single thing, including paying the president, paying Congress, air Force One, all of TSA, health and human services, and on and on. It goes and left the US with no federal government. It would be a maximum of $1.5 trillion in savings, and the deficit is currently pegged at $1.8 trillion, and that is before Trump's various tax cuts.
Speaker 2:Well, it seems we have got our work cut out for us, so we better get started, as time is short and the budget is getting set for this year and also next. By the way, while everyone has a way forward, not all of them are stupid. Rfk Jr wants to consolidate departments and cut medical research. Everybody wants to cut. Admin Musk wants to cut aid to starving children and no more empathy. Hex wants to cut nothing, of course, from defense, and in fact, trump is talking trillions more for his so-called Golden Dome, similar to the Israeli Iron Dome, which I wrote about on Quora and which you are wondering. It won't work. There is a way forward, however, to cut and save a few trillion and, yes, balance the budget. This is a way forward, however, to cut and save a few trillion and, yes, balance the budget.
Speaker 1:This is Henry R Greenfield signing off for the Greenfield Report. Thank you for joining us on the Greenfield Report with Henry R Greenfield. We hope today's insights into the ever-shifting geopolitical landscape have sparked your curiosity and broadened your perspective. Stay connected with us for more in-depth discussions and expert solutions. Until next time, keep exploring the world beyond the headlines.