Still no solutions on massive debt
The Congressional Budget Office has projected a $9.4 trillion cumulative increase in deficits over the next decade.
While provisionally there are greater threats to the American public, nothing will grind down our economic stability and quality-of-life standards in the long term more than an impractical budgetary shortfall.
Last week, we heard President Donald Trump offer a plan to significantly boost military spending while slashing other government entities, particularly the State Department and Environmental Protection Agency. Even if the president’s plan is revenue-neutral, our country is still on an unsustainable path.
The debt growth is especially alarming when looking at the aging population and rising health care costs – the number of Americans older than 65 is more than twice what it was a half-century ago, and that figure is expected to grow by 39 percent in the next decade.
As baby boomers retire, the rate of the workforce will crawl. Mounting debt will also drain public investments in education and infrastructure. If we do not address these issues now, the economic well-being of all Americans is in jeopardy.
Organizations such as The Concord Coalition, a nonpartisan watchdog focused on eliminating federal deficits co-founded by former New Hampshire Sen. Warren Rudman, are taking advantage of the current spotlight on Trump’s budget to draw attention to maintaining Social Security and Medicare programs.
The worry of Robert Bixby, executive director of the coalition, is that the chickens have come home to roost 25 years after Rudman and a bipartisan team challenged those on Capitol Hill who were afraid to cut spending or raise taxes to pay the nation’s bills.
“What’s driving federal spending is aging baby boomers. It’s Social Security and Medicare – they are 40 percent of the budget and growing,” Bixby told The Telegraph.
“They are the parts of the budget growing faster than the economy. So it’s not an accident that the budget is in deficit and the deficit is going up. … That’s really a phenomenon that budgeteers in Washington should really be focusing their attention on.”
In the next 10 years, an estimated 45 percent of non-interest federal spending will go directly to Americans older than 65 through Social Security, Medicare, Medicaid and other federal employee and military retirement plans. At the current rate, Congress would have to essentially eliminate discretionary spending to balance the budget in 2027, and that’s assuming there were not any cuts to entitlement programs or increased taxes.
“The overall picture: Is the federal government in a financially sustainable situation? Because if it’s not, that has an effect on the economy over the long term for everybody,” Bixby said. “The answer is it isn’t. The spending is growing and is projected to grow faster than revenues, which means the deficit will get bigger.”
A country and its citizens will pay for the size government it wants. But a fiscally reckless government, which ignores the challenges of our current deficiency, will result in an empty-pocketed citizenry and overleveraged country.
Any new initiatives from Trump, and very likely the next few presidents, will be quashed if this White House, and future ones, continue to build on borrowed money.