Politicians and commentators these days like to point to an array of threats to our constitutional system. There’s one, though, that doesn’t get nearly as much attention as it should: our national debt.
We may not be in imminent danger of fiscal collapse, but we’re moving into uncharted waters. We are among the most indebted nations in the world, and it’s getting worse. Thanks to our new tax law, we’re staring ahead at routine federal budget deficits north of $1 trillion each year – compared to what now seems like a paltry $665 billion in 2017.
As we look down the road to an aging population, rising entitlement costs, and skyrocketing interest payments, things promise to go from dismal to dire. In just five years, the head of the Congressional Budget Office warned a few weeks ago, we’ll be spending more on interest payments on the debt than we do on our entire military. By 2028, we’ll be closing in on $1 trillion in annual interest payments – just interest!
The more debt we accumulate, the more interest rates rise and the more our spending on debt serves to dampen economic growth. Small wonder former Fed chair Janet Yellen told Congress last year that rising debt “is the type of thing that should keep people awake at night.”
The problem isn’t that nobody’s talking about the debt in Washington. They are. But it’s not a productive discussion – especially among the politicians who will need to roll up their sleeves and tackle it. They give lip service to debt and deficit reduction but for the most part, each party is trying to blame the other.
This is not just a waste of time, it’s counterproductive; a problem of this severity and complexity will not be solved without bipartisan cooperation.
Tackling deficits and the debt always takes a back seat to other priorities: tax cuts and spending increases of all kinds and descriptions. Politicians fall prey to the temptation of saying that economic growth will save us – whether it’s spurred by tax cuts or spending increases. We’ve been fed this line for decades, and it hasn’t worked yet.
What do we do about all of this?
“The time to repair the roof,” John F. Kennedy once said, “is when the sun is shining.” That’s why it’s time right now, while the sun is shining on the economy, to repair our fiscal problems. We need to restrain the growth of spending, especially on entitlement programs. And we need to recognize that this most recent tax cut, with its fiscal stimulus and further explosion of debt, is exactly the wrong medicine.
Like a lot of problems, the longer we wait to act, the larger and more disruptive the eventual solution will need to be. Debt is a major threat to our preeminence in the world, since it constrains our ability to steer the economy and react forcefully to unexpected events. How we deal with it will be a real test of our constitutional system and our politics.
Can Congress and the president go against the popular grain to cut spending and raise taxes? Can we, as citizens, demand credible action by our political leaders even when it hits us in our pocketbooks?
What we need to do is no secret: We have to spend less and tax more. Unless Americans demand action, we will continue down our current road until, at some point, the pavement ends and the wheels come off.
Lee Hamilton is a senior adviser for the Indiana University Center on Representative Government and a former Democratic congressman.