Congress has finally put together a package to address our nation’s fiscal crisis. Debt ceiling discussions are heating up. While it is not too late, it is also not enough.
We can see the impending disaster of our national debt from a distance. As it stands, our debt will pass $25 trillion this year. This is more than five-times the amount of revenue that the federal government expects to receive this year. The federal government would still be in debt if it didn’t spend any money for the next decade.
In a decade’s time, this debt will nearly double to $46.4 trillion. This number is artificially low because it assumes that the 2017 individual income tax cut will expire. Hopefully, this won’t happen.
Limit, Save, Grow Act, just passed by the House Republicans, would have a significant impact on our fiscal situation. The nonpartisan Congressional Budget Office estimates that the Act would reduce the deficits by $4.8 trillion in the next ten years, primarily through a cap on discretionary spending growth.
While spending-addicted liberals may label this a heresy, it is not a “cut,” but a cap on the rate of expenditure. The deficit is not reduced or eliminated, but the growth rate in the next decade of deficits is. Congress instead would add $16,9 trillion to the debt by 2033. It is absurd to label these cuts as draconian.
It doesn’t really do anything to reduce the largest driver of increases in spending — entitlements. It’s easy to say that Social Security and Medicare cannot be touched, but this is not a good policy.
By 2033, the combined cost of mandatory spending programs and interest payments on debt will equal 100 percent of all revenues. This means that all other functions of the federal government are funded by more deficits. Interest on debt will become more expensive. This spiral is a downward spiral of fiscal problems that will only end at the bottom.
The farther out you look, the more gloomy the picture becomes. Congress will receive about $4.8 trillion this year. In three decades, the interest and cost of the mandatory spending programs will be outrageously high at $18,2 trillion. This is more important than our current, staggeringly high national debt.
Imagine how bad that picture sounds. It’s probably too optimistic. Congress will find new ways to spend the money they don’t have, and recessions or national crises may require targeted spending increases. Budgets that cannot predict the unexpected do not take this into account.
This is all to say that the Limit, Save, Grow Act could make a significant difference in our national debt, but it’s still not enough. People who say it’s too drastic need to look again at the numbers, or they risk telling future generations we are selling them out for unsustainable spending.