Driving the debt
“After two years of harrowing confrontations in Washington,” begins a recent Washington Post article, “the national debt is no longer growing out of control and policymakers from President Barack Obama to House Speaker John Boehner, R-Ohio, have rushed to take credit.”
Credit? Considering how so much government spending is funded these days, that's an ironic word to use.
To say that it's way too early to take a victory lap on the national debt is an understatement. Sure, the deficit picture has improved somewhat because of the fiscal cliff tax hikes and cuts in discretionary spending under the Budget Control Act. But our government is still carrying a huge load of debt, and this latest improvement certainly won't last. In fact, absent real reform, it's set to get much worse.
How much worse? If no other changes are made, debt will increase from $11 trillion in 2012 to $19 trillion in 2023. Debt subject to the legal debt limit — which includes debt owed to federal trust funds such as Social Security's — will swell by $9 trillion, reaching $25 trillion after a decade, notes budget expert Alison Fraser.
It's easy to shrug off such giant numbers, but we shouldn't. Such massive deficits have consequences that can prove very harmful. For now, the economy is enjoying low interest rates, but we can't expect that to remain the case under a sharply increased national debt. Interest rates would likely spike, slowing the economy.
That means some families and businesses won't be able to borrow money to get mortgages and car loans. It could place the dream of starting a business out of reach for many Americans. And that's only the beginning. There are other ways that a soaring national debt can adversely affect all of us.
Personal income would suffer, for example. A study by the International Monetary Fund shows that the drag on the economy the debt creates could cause families to lose up to $11,000 every year.
Another danger as debt soars: higher inflation. The government, through the Federal Reserve, could decide to try to reduce the debt by creating more currency. But inflating the money supply can't help but weaken economic growth.
Inflation has been low for so long that most Americans forget how costly it is to live in a high-inflation economy. A rapidly escalating debt could remind them very quickly.
It can also mean bad news for Medicare, Medicaid and Social Security. These massive programs are the main reason debt is growing by leaps and bounds. Yet Congress still hasn't taken the steps necessary to make these programs affordable and sustainable. Such a head-in-the-sand mentality can only jeopardize benefits for those who need them the most.
Spending can't continue to rise at these unsustainable levels. In 2012, Washington collected $2.4 trillion in taxes, more than $20,000 per household. But it wasn't enough. The federal government actually spent $3.5 trillion.
“Lord, the money we do spend on government,” Will Rogers once quipped. “And it's not one bit better than the government we got for one-third the money 20 years ago.”
More than 80 years after he said that, the problem's only worsened. Lawmakers need to get serious about taming the debt, not take bows for fleeting improvements.
Ed Feulner is the former president of The Heritage Foundation (heritage.org).
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Pirates trade for Mariners’ Happ, Dodgers’ Morse
- Armstrong escapee caught; murder charges pending
- Heyl: Longtime disc jockey Jimmy Roach to turn dismissal into brighter times
- Experimental Ebola vaccine could stop virus in West Africa
- Inside the Steelers: Rookie linebacker Chickillo continues to excel
- Steelers’ reserve quarterbacks vie to secure spot behind Roethlisberger, Gradkowski
- Pirates’ Burnett endures another poor start in blowout loss to Reds
- Pirates bolster bullpen by trading for former closer Soria
- Judge rules McCullough guilty of taking money from elderly woman’s estate
- Handful of swimmers to test will in Three Rivers Marathon
- Steelers stress improved conditioning in attempt to play past injuries