Our nation is now staring at trillion-dollar annual deficits. The Congressional Budget Office in a report this month warned the nation once again that our yearly red ink could top $1 trillion as soon as next year. Our national debt is projected to grow faster than the economy — forever.
How many warnings will it take for our leaders to pay attention? What is the tipping point that will force our leaders to act?
During the past two years, our Congress and president ran up a massive bill, adding $2.4 trillion of new debt over the next decade. It was a bipartisan spending spree — from tax cuts to spikes in defense and nondefense domestic spending. Everyone got to throw something onto the national credit card.
Never at a time of such economic prosperity have our deficits been so high. During times of growth, our leaders should have paid down the debt and addressed our underfunded and insolvent social safety net programs. Instead, they poured debt-fueled stimulus into the economy and created a short-term sugar high at the expense of our long-term financial security.
When we served Minnesota in Congress during the 1990s, deficits were on the decline. They eventually turned into surpluses. Both parties celebrated fiscal discipline, and President Bill Clinton often cites those surpluses as one of his great achievements. So does former Republican Speaker Newt Gingrich.
Our leaders should hang their heads in shame for where they have led us since then. The deterioration is so dramatic that some public figures are testing out a once-fringe argument that debt doesn’t really matter in an attempt to diminish the threat.
Ask the average American if they are happy that more than $2,000 of their tax bill this year went just to interest payments on the debt. Or that on our current path we will one day spend more on interest each year than on the military or Medicare. It will certainly matter then.
It’s easier to pretend the 22 trillion-pound monster in the room isn’t there than to turn around and face it, but we will have to face it eventually.
If another war, disaster or recession hits, that day could come sooner than some are expecting. How do we respond to a crisis when our debt is larger than the entire economy? Or double the size? Or triple? Those are the projections for our debt.
Record debt doesn’t just hurt the nation’s bottom line, it hurts our people. It slows income growth, crowds out other priorities, pushes up interest rates on mortgages and credit cards, and passes the buck (along with less opportunity) to the next generation.
It is going to take new revenue and spending restraint to dig out of the hole where we find ourselves. The first step to fiscal stability is to stop the digging and for politicians to stop tearing each other apart just for proposing fiscal solutions instead of “free lunches.”
There was a time when bipartisan compromise was a good thing that solved problems. In fact, it brought us budget surpluses once. Our leaders need to meet in the sensible center to solve this deficit problem once again.
Tim Penny and David Minge are board members of the Committee for a Responsible Federal Budget.