It’s not fun to talk about fiscal responsibility, but it’s becoming a mathematical necessity.
In 2008, the national debt was $10 trillion. It nearly doubled under President Barack Obama. Under President Donald Trump, it’s grown to $21.5 trillion. The debt is now larger than the country’s annual gross domestic product, a level not seen since the end of World War II.
It’s not just that the United States owes its lenders trillions. It must pay interest on those loans. The Federal Reserve kept interest rates low during the Obama administration as the economy struggled. This artificially lowered the government’s interest payments. The economy has soared under Mr. Trump, and the Federal Reserve has been increasing interest rates to curtail inflation.
This has led to more than simply higher costs for borrowers. It has also raised rates for the federal government, the biggest debtor of all. As The Wall Street Journal reported earlier this month, in 2017, the federal government spent $263 billion on interest, accounting for 6.6 percent of all outlays.
That amount will balloon to $915 billion by 2028, equivalent to 13 percent of all federal spending. It’s hard to comprehend numbers that large, so consider how this compares with other items.
By 2020, interest will cost the federal government more than Medicaid. In 2023, the federal government will spend more on interest than defense. In 2025, interest spending will outpace spending on all discretionary programs, excluding defense. Those estimates come from the Congressional Budget Office.
That’s a best-case scenario. The CBO projections don’t include the ramifications from an economic downturn in the next 10 years, which is a virtual certainty. Expenses, such as food stamps and unemployment benefits, would increase. Revenues, especially income taxes, would drop. That would explode the debt at a greater rate, as the government relies on even more deficit spending to make up difference.
Democrats are quick to blame the tax cuts Republicans passed last year, but that’s deliberately short-sighted. The doubling of the deficit under Mr. Obama resulted from spending increases. Profligate spending has continued under Mr. Trump. The budget deal he signed last March increased spending by $300 billion over the sequestration caps passed in 2011.
In addition, the biggest expenditures — the automatic growth of Social Security and Medicare — are the politically hardest to reform.
The politics are tricky, but the math isn’t. Government spending is unsustainable — just like fiscal conservatives and libertarians have noted for decades.
The sooner elected officials curb spending, including reforms to Social Security and Medicare, the less painful those changes will be. The numbers make it obvious: If something can’t continue, it won’t.
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