A more accurate and open way to talk about government spending and the national debt By Michael McCarthy
This article should be about the annual growth of the United States national debt ($1,227.3 billion for 2019) or its overall value ($23,169.0 billion) or even those at fault for the high debt (every elected representative in Washington), but it is not. This article is about how we —journalists, scholars, and everyday consumers of information — should more accurately discuss governmental spending with regards to the debt incurred with nearly all expenditures.
Generally, current discussions on government spending de-link the cost estimate from what it really takes to pay for the expenditure: the cost plus the borrowing cost. The lack of specificity and clarity is important because most of the government’s spending — Veteran benefits, cancer research, or Head Start services for preschool children — comes, in part, from borrowed money. Discussing a government expenditure as if it is a one-time allocation fails to capture the real cost.
Photo from AP
Any person or organization that strives for accuracy should endeavor to reconnect government spending to the actual cost in any reporting, analysis, or discussion. Articles mentioning government spending should acknowledge the borrowing required in some way; below are some examples of how this could be accomplished.
Reporting could include an estimated amount of tax dollars spent and dollars borrowed to cover governmental spending. Here is a hypothetical example: “The $1 million project (of which $782,363 are from tax-payers and $217,637 are borrowed) starts in February.” These values were calculated from the estimated budget “Deficit” ($0.960 trillion) as a percentage of “Total Budget Spending” ($4.411 trillion) for 2019, about 21.8%.
Alternatively, reporters could identify the current ratio of government revenues and governmental borrowing: “The $1 million project, 21.8% of which is borrowed, starts in February.”
More complex disclosures could identify the estimated total amount needed to pay the borrowed funds given the current borrowing rate and typical loan duration. This could look like: “The $1 million project (likely costing $1.5 million with interest due to borrowing) starts in February.” These estimates or disclosures could be footnotes or parentheticals in the articles.
Photo from U.S. House of Representatives
Missing from this discussion is the generational cost of government spending. Perhaps, a more compelling narrative would be discussions that include a time-based estimate of how long it will take to pay off an expenditure. “The $1 million project (that will take approximately 10 years to pay off) starts in February.” More sophisticated disclosures could identify the estimated total dollars and the time required to pay off the spending.
Some strive to demonize government spending, but that is not the aim of this critique; I hope to inspire editors of news outlets and academic journals — and all of us — to discuss government spending more accurately. Including the borrowing cost when reporting government spending is more open and more accurate. Government spending generally serves the people of the United States but we need to have a more honest discussion about the actual costs for each expenditure.
Michael McCarthy is Assistant Professor and Director of Data Science at Utica College.
