Today’s blog covers four very different subjects. Two concern the challenges facing our federal government, while the other two remind us that there are still plenty of things worth appreciating, particularly here in northern Michigan during October.
Another Year, Another $2 Trillion Deficit
For years, I’ve been concerned about the federal government’s inability to bring its spending and revenues into balance. As someone who spent much of his professional career working with budgets and financial statements, I find it increasingly difficult to understand how our elected officials can continue ignoring the long-term consequences.
The Congressional Budget Office estimates that the federal government finished fiscal year 2026 with a deficit of approximately $1.99 trillion. That’s about 12% more than last year and represents another enormous addition to our national debt.
Think about what that means. During the past year, the federal government spent approximately $7.4 trillion while collecting only $5.4 trillion in revenue. For every dollar collected, Washington spent about $1.37.
The most troubling part is that we’re running deficits of this magnitude during a period when the economy is not in a major recession. Historically, deficits approaching 6% or more of GDP were associated with wars, recessions or national emergencies. Today, they’ve become part of our normal operating budget.
Interest on the national debt has become one of the fastest-growing federal expenditures. During fiscal 2026, interest costs exceeded $1.1 trillion, surpassing spending on national defense and Medicare. That money doesn’t build roads, educate children, provide healthcare or strengthen national security. It pays for money we’ve already borrowed.
The problem is structural. Social Security and Medicare are growing as the population ages, healthcare costs continue to rise, and neither political party has demonstrated much willingness to make the difficult decisions necessary to control spending or increase revenues.
The tax legislation enacted in 2025 has also affected federal revenues. According to The Wall Street Journal, corporate income-tax receipts declined approximately $70 billion, or 16%, during fiscal 2026. Much of that reduction resulted from expanded deductions for research, equipment and manufacturing investments. Supporters argue that these provisions encourage economic growth and investment, while critics question whether the country can afford additional tax reductions while running enormous deficits.
There is some merit to encouraging business investment. However, tax incentives don’t eliminate the need to pay our bills. Some deductions merely shift tax collections into future years, while others permanently reduce revenue.
Both parties share responsibility for the situation. Republicans generally emphasize spending restraint and economic growth, while Democrats place greater emphasis on protecting social programs and raising additional revenues from higher-income taxpayers. Neither approach, by itself, solves the problem.
The upcoming congressional elections may produce divided government. Historically, that has sometimes resulted in bipartisan agreements to control spending. Unfortunately, it has also produced compromises in which both parties agree to support each other’s spending priorities.
I keep coming back to a simple question. If we cannot make meaningful progress toward balancing the federal budget during relatively good economic times, what happens when the next recession arrives?
At some point, our children and grandchildren will inherit the consequences of decisions we’re unwilling to make today.
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Can Wall Street Help Rebuild America’s Missile Inventory?
For months, we’ve heard concerns that the war with Iran has significantly reduced America’s inventory of missiles and other sophisticated weapons. That raises an important national-security question. If the United States became involved in another major conflict, particularly with China or Russia, would we have sufficient weapons available?
A recent Wall Street Journal article provided an interesting look at how the Trump administration is attempting to address the problem.
The effort is being led by Deputy Defense Secretary Steve Feinberg, a billionaire businessman who co-founded Cerberus Capital Management, a major private-equity investment firm. Feinberg has been given the responsibility of helping the Pentagon accelerate weapons production and strengthen the nation’s defense-industrial base.
His approach is quite different from traditional Pentagon procurement.
Rather than relying exclusively on military procurement specialists, Feinberg has brought in experienced business executives and consultants to examine manufacturing operations, supply chains and production bottlenecks. His efforts include hiring approximately 300 retired executives, many with experience in the automobile industry, to visit defense contractors and help identify opportunities to improve efficiency.
That caught my attention.
Having spent much of my professional career in management and finance, I understand the value of bringing experienced business operators into an organization that needs to improve its performance. Manufacturing expertise, supply-chain management, cost controls and production scheduling are disciplines that can benefit almost any large organization.
The Pentagon certainly qualifies as a large organization.
According to the Journal, Feinberg has also authorized a $300 million consulting arrangement with Alvarez & Marsal and a contract worth up to $244 million with Palantir for technology intended to improve manufacturing efficiency. His team has negotiated preliminary agreements with defense contractors designed to increase the production of missiles and other critical weapons.
There is a legitimate argument for trying something different. Our military procurement system has long been criticized for excessive bureaucracy, slow decision-making and cost overruns. If experienced manufacturing executives can help produce more weapons in less time and at lower cost, taxpayers and our military could benefit.
However, there are reasons for caution.
Many of Feinberg’s initiatives involve companies and executives with connections to his former private-equity business. Critics have raised questions about potential conflicts of interest, the use of outside consultants and whether some of these services duplicate work already performed by Pentagon employees.
There is also the matter of cost. The administration has proposed substantially increasing defense spending, but Congress has yet to fund many of the initiatives. A plan to manufacture additional missiles doesn’t accomplish much unless the money, materials, equipment and skilled workers are available to make it happen.
Feinberg’s supporters argue that his business experience can help modernize an inefficient system. His critics question whether Wall Street’s approach to corporate restructuring is appropriate for an organization responsible for national defense.
Both sides have legitimate points.
The Pentagon should benefit from the best manufacturing and management practices available. However, spending hundreds of millions of dollars on consultants and outside advisers should come with clear expectations, measurable results and complete transparency.
In the end, the test should be relatively simple. Are we producing more of the weapons our military needs, are we producing them faster, and are taxpayers receiving good value for their money?
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Living in God’s Painting Canvas
One of the wonderful things about living in Petoskey is experiencing the changing seasons, particularly autumn.
At this time of year, the combination of brilliant fall colors, beautiful blue skies and the deep-blue waters of Lake Michigan and our many inland lakes creates scenery that’s difficult to describe. Sometimes it feels as though we’re living inside God’s painting canvas as He creates another masterpiece across northern Michigan.
I’ve lived through enough Michigan autumns to appreciate the beauty. However, this year I found myself wondering about something I probably should have learned in middle school science.
Why do leaves change colors? Why do some trees turn yellow while others become bright red or orange? Why does the same tree sometimes display several different colors over the course of two or three weeks?
Since science was never my strongest subject, I asked ChatGPT for a refresher course. It turns out that the process is both fascinating and surprisingly understandable.
During spring and summer, leaves contain large amounts of chlorophyll, the substance responsible for their green color. Chlorophyll allows trees to absorb sunlight and convert it into the energy needed for growth. Throughout the growing season, the green chlorophyll is so dominant that it hides many of the other pigments already present in the leaves.
As autumn approaches, the days become shorter and the nights longer. Trees recognize these changes and begin preparing for winter. Chlorophyll production slows, and the green pigment gradually breaks down.
That’s when something remarkable happens.
The yellow and orange pigments, which were present in the leaves throughout the summer, begin to show themselves. These pigments are called carotenoids, the same general family of pigments responsible for the orange color of carrots.
The brilliant reds and purples come from another group of pigments called anthocyanins. Unlike the yellow and orange pigments, many of these are produced during autumn as sugars accumulate in the leaves.
Weather plays an important role. Sunny days and cool nights, particularly when temperatures remain above freezing, often produce the most spectacular red colors. The amount of moisture available during the growing season also influences how vibrant the colors become.
That explains why our fall colors can be spectacular one year and somewhat disappointing the next.
It also explains why the same tree can display several colors at once. As the green chlorophyll disappears, the yellow and orange pigments become visible. In some leaves, red pigments are developing at the same time. The combination can create the remarkable mixtures of green, yellow, orange and red that we see throughout northern Michigan.
Different trees also have different characteristics. Sugar maples are known for brilliant yellows and oranges, red maples can become spectacular shades of scarlet, and oaks often produce darker reds, browns and bronze colors.
Eventually, the tree completes its preparation for winter, withdrawing useful nutrients from the leaves and forming a separation layer where each leaf attaches to the branch. The leaves fall, and the tree enters its winter dormancy.
The spectacular colors we enjoy for a few weeks each autumn are not the beginning of something new. They’re part of the tree preparing for a period of rest before another season of growth. There’s something reassuring about that.
For now, I’m simply going to enjoy the scenery. And the admission price is free.
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A Little Appreciation for Major League Baseball Umpires
After spending 50 years umpiring baseball, I’ve developed a particular appreciation for the men and women who officiate sporting events. It’s a job where everyone notices your mistakes and almost nobody notices when you get everything right.
That was one reason I was particularly interested in the performance of the home-plate umpires during Wednesday’s Major League Baseball playoff games.
Nic Lentz, Dan Bellino, Tripp Gibson and Todd Tichenor worked behind home plate during the four games. According to independent strike-zone tracking data, the accuracy of the called balls and strikes in those games was approximately 96% to 99% according to different websites who track umpire performance.
That’s impressive.
Think about what a home-plate umpire is being asked to do. A major-league pitcher may throw a baseball at 95 to 100 miles per hour, sometimes with movement that causes the pitch to break several inches just before reaching home plate. The umpire must determine whether any part of that ball passed through a three-dimensional strike zone that varies according to the batter’s stance and body dimensions.
He must make that decision almost instantly, often with a catcher moving his glove to influence how the pitch appears. Then he must repeat the process more than 200 times during the game.
Fans watching television have the benefit of an electronic strike-zone graphic and repeated slow-motion replays. The umpire has one opportunity to make the call, and he must do it in real time without the benefit of an electronic strike zone.
Having spent so many years behind home plate, I can tell you that calling balls and strikes is considerably more difficult than it looks.
That doesn’t mean umpires shouldn’t be held accountable. They should. Professional umpires are highly trained and well compensated, and accuracy is an important part of their responsibility. However, I sometimes think we’ve allowed television technology to create unrealistic expectations. We now expect perfection from human beings performing a task that is extraordinarily difficult.
In 2026 Major League Baseball introduced an automated ball-strike challenge system that allows teams to challenge selected calls using electronic technology. It provides a mechanism for correcting important mistakes while preserving much of the traditional role of the home-plate umpire.
However, I hope we don’t lose sight of the human skill involved. An umpire who gets approximately 96 out of every 100 ball-and-strike calls correct is performing at a remarkably high level.
During my years as an umpire, I learned that the best games were often the ones where nobody remembered who the umpire was. The players played, the coaches coached, and the officials did their jobs without becoming part of the story. Perhaps that’s the highest compliment an umpire can receive.
Today’s Orchids of the Day go to Nic Lentz, Dan Bellino, Tripp Gibson and Todd Tichenor for their work during Wednesday’s playoff games.
I am especially proud of Nic Lentz, who started umpiring as a 16-year-old high school student at Hartland High School in Michigan. Although Nic is half my age, he was one of the great instructors who taught me and many others at the Southeastern Michigan Umpire Camp.
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Quote of the Day
“The first wealth is health.”
— Ralph Waldo Emerson
Sometimes we spend so much time worrying about money, politics and the problems of the world that we forget how fortunate we are when we have our health, our families and the opportunity to enjoy another beautiful Michigan autumn.
Orchid of the Day
Today’s Orchid goes to Major League Baseball umpires Nic Lentz, Dan Bellino, Tripp Gibson and Todd Tichenor, whose performance behind home plate during Wednesday’s playoff games deserves recognition. See above story.
Onion of the Day
Today’s Onion goes to Hurricane Isaias, which is threatening the Gulf Coast, including Gulf Shores, Alabama, where Leah and I plan to spend January and February.
Hurricanes are serious business, and my first concern is for the people who live in the affected communities. I hope everyone has taken the necessary precautions and that the damage is considerably less than currently feared.
On a more personal note, I’m hoping the area we enjoy visiting each winter is spared significant damage.
Question of the Day
Should Major League Baseball eventually replace home-plate umpires’ ball-and-strike decisions with a fully automated system, or is the human element an important part of the game?
As a longtime umpire, you probably know where my sympathies lie. However, I’d be interested in hearing what others think.
Video of the Day
Justin Verlander Interviews Freddie Freeman
Two future Hall of Famers sharing a lighthearted moment during the baseball playoffs.
Sometimes sports provide their best entertainment when the players aren’t actually playing.