There’s a reason everything is getting so expensive and inflation seems intractable, and it goes way beyond just Trump’s stupid war-of-choice in Iran. It explains why the morbidly rich keep getting richer while the rest of America struggles, and why people are paying absurd interest rates on everything from credit cards to home mortgages to car loans, and it all rolls back to a wild conspiracy Republicans hatched in the late 1970s and Reagan put into place in 1981.
It starts with — thanks to three mind-bogglingly corrupt and illegitimate Republican presidents (Reagan, W. Bush, and Trump) — our national debt rolling past $40 trillion in the next few days, probably before Labor Day. That’s more than our entire nation’s total Gross Domestic Product (GDP) — the sum of all goods and services produced in the last year, which came in just a whisker over $32 trillion.
And we’re paying over a trillion dollars a year on that debt that was intentionally run up by those 3 Republican presidents and their buddies in Congress, which is a large part of why we’re the only developed country in the world where families can go bankrupt because somebody got sick and kids graduate from college with debt that will take them decades (if ever) to pay off.
As if to shove it in our faces, last week Trump proposed a new cut in the capital gains tax that is pretty much exclusively paid by rich people who, instead of earning a paycheck that’s subject to a top 37%, today already only pay a top 20% tax on the money they make with their investments. To add insult to injury he just raised taxes on working class people’s wages by an average of $900 this year via the GOP’s Big Beautiful Bill that passed without a single Democratic vote.
I remember when Reagan was cutting taxes and spending like a drunken sailor back in the 1980s (he and Bush Sr. after him tripled our nation’s debt) and I was constantly telling people:
“Give me a $2 trillion credit card and I’ll show you what it’s like to live large, too.”
But for some reason Democrats never picked up on the message that the GOP’s “fiscal conservatism” was a fraud, and generally still haven’t. That has to change.
Trump, Mike Johnson, and John Thune are borrowing money at a rate that would’ve made Reagan blush. They added $1.8 trillion to our national debt in just the first ten months of this fiscal year (which started last October 1st) and we’ve paid interest on that debt to the tune of $1.17 trillion just so far this fiscal year, up 15 percent because all this debt is driving up bond yields.
After all, when Reagan came into office our national debt was just a bit over $800 billion ($0.8 trillion) and when it was on the verge of hitting a trillion dollars he disingenuously told a joint session of Congress:
“Our national debt is approaching $1 trillion. A few weeks ago I called such a figure, a trillion dollars, incomprehensible, and I’ve been trying ever since to think of a way to illustrate how big a trillion really is. And the best I could come up with is that if you had a stack of thousand-dollar bills in your hand only 4 inches high, you’d be a millionaire. A trillion dollars would be a stack of thousand-dollar bills 67 miles high.”
Prior to Reagan’s presidency, we’d been steadily paying down our 106-percent-of-GDP debt from World War II; by the time he came into office in 1981, Presidents Truman, Eisenhower, Kennedy, Johnson, Nixon, Ford, and Carter (and their Congresses) had paid it down to a mere 31% of GDP.
And while we were paying down that debt, we also built the interstate highway system, put into place free college and cheap mortgages for millions with the GI Bill, created Medicare and Medicaid, built thousands of new schools and hundreds of new hospitals, and sent men to the moon.
We were able to do all that because during that entire New Deal era, right up until Reagan took office, the top marginal income tax rate on morbidly rich money hoarders ran between 70 and 91 percent.
One could get rich, but it was nearly impossible to become an oligarch like today.
Then Reagan took office and decided to follow Jude Wanniski’s advice to the letter, and everything changed. I’ve written about Jude’s “Two Santas” strategy often enough that regular readers can probably recite it in their sleep, but in essence it was:
“Cut taxes on the rich and spend like a drunken sailor when a Republican is in the White House, and then scream about the national debt and demand cuts to social programs when a Democrat comes into office.”
Reagan and Bush Sr. took our national debt from under $1 trillion and jacked it all the way up to $4.4 trillion in a mere 12 years. If you add up the impact of Reagan’s, Bush’s, and Trump’s tax cuts for billionaires and corporations, and add in the $8 trillion from the wars in Afghanistan and Iraq that GW Bush lied us into, it pretty much equals our entire ~$40 trillion national debt today.
Jude was right, and his proposed scheme worked: because three corrupt Republican presidents have embraced his strategy, our national debt is now at 123% of GDP.
And now Trump wants to give the Pentagon another $1.5 trillion next year, an explosion of “defense” spending that will re-stimulate the economy and add to our debt, crushing families as it spikes interest and inflation. Not to mention the billions he’s demanding from Congress right now to cover the costs of his and Bibi’s stupid war against Iran.
And here’s where the story gets wild with a point that probably 95 out of 100 Americans don’t realize: that trillion-plus dollars we pay every year for interest on our national debt doesn’t just vanish or fly into outer space; most of it goes straight into the pockets and money bins of the morbidly rich.
What a scam!
Forty-five years of Reaganomics have converted what were once the tax bills for the morbidly rich into a source of extremely safe revenue for them, since they’re among the largest holders of US Treasuries. And we’re paying the bill to shovel all that interest money into their money bins.
Money that flowed from the rich into the Treasury between the 1930s and 1980s as taxes now flows from the Treasury into the pockets of the extremely rich every quarter as interest payments, and it’s paid for by working people with their paychecks.
We spend more making interest payments to rich people every year than we do on Defense or Medicare, and almost as much as we spend every year on Social Security; interest on the national debt is the second largest line-item in the entire national budget.
And if that isn’t enough of a slap in the face, Todd Blanche signed an order saying the IRS is forever barred from examining Trump’s prior tax returns or those of his family. And the “anti-weaponization fund” was just a ruse; they’re now paying Trump’s buddies who committed crimes and were prosecuted for it out of existing Treasury funds.
They never needed that fund. But Trump sure did want his ~$100 million tax bill that the IRS has been trying to collect for almost two decades wiped out. And now it is.
That’s right, Todd Blanche handed Donald Trump ~$100 million of our tax dollars last week, and almost nobody in the media or Democratic leadership is even discussing it.
The national debt itself isn’t the bomb we need to worry about; Japan’s is 237 percent of GDP (compared with our 121 percent) and they have universal healthcare, bullet trains that run on time, a life expectancy of 84 (ours is 79), and virtually no homelessness.
What’s important is what we’ve bought with all those trillions we threw into our debt over the past 45 years.
When Reagan was president and our press was falling all over itself to congratulate him on being an economic genius as he juiced our economy with deficit spending, Louise and I and our three kids lived in Germany. I still remember the first time one of our children was injured and we took her to the doctor’s office where they refused to let me pay for anything. There was no bill, no co-pay, no deductible, nothing.
In the 1990s I was giving a speech at King’s College in London and we were staying at the home of the conference’s organizers. Our youngest was homeschooling then and thus traveling with us, and she came down with a pretty severe ear infection. The doctor drove over to their home at 10 at night, saw and diagnosed her, gave us a bottle of Amoxicillin, and refused to take a penny.
Both countries were carrying huge debt loads themselves at that time, in part a hangover from WWII (Germany was around 60% of GDP and the UK was around 40%) but both spent their money on their people instead of tax cuts for the rich followed by interest payments to those same wealthy people.
We, on the other hand, spent $40 trillion and got a billionaire class that’s now seized control of much of our media and political system.
We Americans have already paid for universal healthcare and free college multiple times over in the years since Reagan began this GOP scam; we just never received them.
Republicans think of our national debt as a giant wall they’ve erected around the New Deal and Great Society programs, a wall that’s been steadily squeezing us ever since Reagan declared war on working class people and unions in the 1980s. A wall that will keep out Medicare for All and free college.
Have you noticed how little news coverage our record national debt — and last month our hitting the largest budget deficit in American history — has gotten in the corporate press? That’s in part because Democrats have failed miserably at any effort to educate people — or generate outrage — about this scam.
And that has to change.
I’m not suggesting that Democrats start behaving like how Republicans turn into “deficit hawks” every time a Democrat is in the White House. Instead, they need to be pointing out how Republicans have — for 45 years — forced working class people to pay the morbidly rich’s interest on the Treasuries they’re holding instead of making America a better place for average families like every other advanced democracy in the world has done.
When Republicans loudly and self-righteously proclaim that America can’t afford Medicare for All or tuition-free college, we all need to be clear about what they’re really saying. They’re telling us that they’ve already spent that money, on themselves and their rich buddies, and stuck you and me with the debt and the interest payments.
We can step into that information void created by our captured media and flaccid Democratic messaging. Tell everybody you know how this has screwed most of us, while making Musk, Ellison, Bezos, Zuckerberg, and their billionaire class richer than any pharaoh or king in world history.
And demand that our candidates promise to raise taxes on the morbidly rich and corporations back up to reasonable levels while funding modern social programs like everybody else has.
After all, we paid down most of our national debt once before following the most expensive war in world history, and we did it while building the world’s first more-than-half-of-us middle class because we taxed great wealth at rates requiring the morbidly rich to contribute to society like the rest of us. It worked then and it will work now, if we can just squeeze the political and moral courage out of our elected representatives.
Democrats have a story to tell here that’s both true and devastating, but it appears that they’ll only tell it to America if we all make enough noise.
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Louise’s Daily Song: “Republicans Rigged America’s Debt”
Comments on the Saturday Report:
Saturday Report 8/15/26 — Trump Shocks 5,000 Sailors With Remark About Their Nine-Month Deployment…
The AI information is very worrisome, but would laws by Congress or any other nation really begin to control its development? Sure, new rules might help guide things, but North Korea certainly is not going to stop doing...whatever it is doing with this. And for that matter people sitting in figurative basements all over the world will continue to play with these programs.
~ docrwh Weil
Republicans aren’t republican; they oppose the very idea of a nation of laws and rights that apply equally to everyone. Nor are they conservatives, since they don’t believe in nature conservation or respecting the sacrifices that our military personnel make. They are reflexive and compulsive anti-liberals; whatever liberals are for, they are against, and with a bitter vengeance.
~ Jeffrey Hobbs
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