Unfortunately, discussion over our skyrocketing national debt is only a footnote in the testy presidential campaign this year. Hopefully, the upcoming debates will change that.
The new President and Congress face a day of reckoning next March when the limit on the amount of money we can borrow reaches the $20.1 trillion. Either both parties reach an agreement on funding our government or the President orders a shut down.
That’s why voters should know where the candidates stand on handling our massive federal debt before they cast their ballots this November.
The United States Constitution and the accompanying Antideficiency Act mandates action when federal agencies and programs lack appropriated funding. If the funding gap lasts long enough, federal law requires the President to furlough non-essential personnel and curtail agency activities and services.
Since 1981, there have been five government shutdowns, the longest of which lasted 21 days (from December 16, 1995, to January 6, 1996) under President Bill Clinton. During Barack Obama’s presidency, there was a shutdown lasting from October 1 to 16, 2013, when opponents of Obamacare attempted to leverage defunding it against preventing the shutdown.
While the last cessation drew attention to our mounting deficit, other issues such as national security, climate change, excessive regulations and an underperforming economy have overshadowed it.
Last May, the Wall Street Journal warned “the trajectory of the debt is worrisome for one inescapable reason: When you owe a lot of money and interest rates rise, your interest tab mounts.”
President Obama will leave the White House known as “Mr. $20 Trillion,” the Associated Press reported a year ago. On his watch, our debt nearly doubled. It was $10.6 trillion when he entered the Oval Office.
The Cato Institute reported by 2024 that interest payments will rise to more than $876 billion. “Not long afterward, we will be paying a trillion dollars every year just for interest on the debt. By 2035, in fact, interest on the debt will be tied with Medicare as the second largest line item in the federal budget, trailing only Social Security.”
Cato’s Michael Tanner reported in 2014: “Under this scenario, debt held by the public alone would reach an astounding 205 percent of GDP (our nation’s total economic output) by 2045. Shortly after that, the CBO (Congressional Budget Office) says it is unable to make further projections because no one might be willing to buy U.S. government debt.”
Today, we owe $19.5 trillion. That is enough money that if you stack the equivalent number of $1 bills, it would circle the Earth 75,558 times. Next month, Treasury will sell another $1.5 trillion.
Telling voters that every American man, woman and child owes $60,000 and every U.S. taxpayer’s share of the debt is $163,000 because of our borrowing habits doesn’t resonate.
To get the point across, the Peter G. Peterson Foundation is spending millions running ads across the nation attempting to interject the national debt into the 2016 election campaign discussion.
Peterson is urging voters to “Ask for a Plan!” The core message: “As the debt grows, money for other programs like education will shrink. In just eight years, interest on the debt will be our third largest federal program. Bad news for our bridges and roads.”
Former Indiana Gov. Mitch Daniels is even blunter. He told Congress recently: “When today’s young Americans learn the extent of the debt burden we have left them, they will legitimately question the premises of self-government.”
Hopefully, voters will stop and think about what ramping up government borrowing does to our next generations of Americans — the ones who will have to pay the bills.
Don C. Brunell is a business analyst, writer and columnist. He retired as president of the Association of Washington Business, the state’s oldest and largest business organization, and now lives in Vancouver. He can be contacted at theBrunells@msn.com.