The most expensive government in human history is bankrupt.
The federal debt is so large that the interest payments cost the government around one-half trillion dollars per year. If interest rates return to their historical average, the annual interest on the debt will cost about twice what the government spends on the entire Department of Defense.
Our government can’t afford its current interest expense, let alone the expense it will incur when interest rates rise.
“We don’t have a budget crisis. We have a spending crisis” – Jonathan Hill
The CBO forecasts that large budget deficits over the next 30 years are projected to drive federal debt held by the public to unprecedented levels—from 78 percent of gross domestic product (GDP) in 2019 to 144 percent by 2049. That projection incorporates CBO’s central estimates of various factors, such as productivity growth and interest rates on the federal debt. CBO’s analysis indicates that even if values for those factors differed from the agency’s projections, debt several decades from now would probably be much higher than it is today.
While deficits are often inflationary and always pernicious, curing them by raising taxes is equivalent to curing an illness by shooting the patient. Murray Rothbard
This is not a Democrat or Republican problem–it’s both. Republicans campaign like Libertarians but govern like Democrats. Everybody is addicted to the pork barrel.
During the last few debates, the candidates listed all the “free” things from health care to college tuition to childcare. Andrew Yang promised everyone $1,000 per month if he wins. Apparently, buying votes is legal if you pay with someone else’s money.
Social Security and Medicare entitlements are at risk if the federal debt continues to grow. People argue that increased defense spending is to blame for the rise in the national debt, or the recent tax cut. While both of those are factors, Hoover Institution economist John Cogan, author of a new book about federal entitlements (The High Cost of Good Intentions), notes that essentially all the rise in the federal debt since World War 2 can be laid at the feet of entitlement programs. Entitlement spending, Cogan argues, has risen from 4% of GDP to 14% and now accounts for nearly two-thirds of all federal spending. Since it will be almost impossible to cut federal spending and the national debt without touching expensive entitlements, your entitlements—especially if you are a boomer.
The Republicans haven’t met a defense budget they couldn’t increase and the Democrats insist on comparable increases in domestic spending. Treasury Secretary Steve Mnuchin said government spending is “not an issue we’re focused on right now.”
As President Herbert Hoover said, “Blessed are the young for they shall inherit the national debt.”
But not one candidate mentioned the $22 trillion federal debt. These are the questions we need to hear answered. From both sides.
But, will ever really be able to bite the bullet and try and get a handle on it?