How to Tackle U.S. Debt
For all the talk in Washington, The Heritage Foundation offers a way forward.
Earlier this year, the U.S. national debt reached $22 trillion, which is more than America’s annual gross domestic product ($20.5 trillion in 2018). And projections reveal an ominous picture for the debt our children will face in the years to come.
What’s the worry? Unemployment is low and the economy is thriving, right?
The Heritage Foundation’s David Ditch writes, “As the debt increases and interest payments rise, that creates a heavier drag on the economy. Although it is hard to measure how much economic growth we miss out on because of the debt, even relatively small growth effects add up to thousands of dollars lost per year for every worker.”
Ditch adds, “This is maddeningly unfair to younger and future generations. Not only are today’s children being saddled with tens of thousands of dollars in national debt, but they may also have to navigate an economy that offers them less opportunity than they would have if political leaders were more responsible with the nation’s finances.”
These are all good points, but we’ve heard (and made) them before. And yet Congress never addresses the national debt. Our elected representatives talk about its impact on the economy and the unfair burden that debt places on future generations, and then they move onto other issues of the day. Voters go along with it.
The Heritage Foundation hopes to change all this. Its scholars have put together the Blueprint for Balance, a policy proposal that includes making the Tax Cuts and Jobs Act permanent, eliminating government waste, reforming Social Security and Medicare (the main drivers of the debt), and returning authority to states and local governments.
At least Heritage has a plan, though it doesn’t address the core issue that’s prevented us from tackling the debt for so many years: lack of political will in Washington. None of the goals in the Heritage policy can be achieved without both parties making some bold and risky political moves. Even Ditch admits, “Political leaders must make a choice. They can choose to do nothing — in which case debts will continue to pile up, Social Security will run out of money to pay benefits, and the federal government will remain too big to be managed properly — or, they can choose to move toward socialism.”
And this last choice is the easiest of them all, which is one reason our national debt continues to climb under a Republican president who repeatedly promised to drain the swamp.
Sure, President Donald Trump has cut taxes and reduced regulations, but he’s signed as much spending into law as we’d expect from a Democrat president. Then again, he was elected to build a border wall, not reduce the debt. And that’s part of the problem. Unless and until the American people press Congress to take action, nothing will change. As our own Nate Jackson recently wrote, “Few in Washington ever really learn lessons. They just keep spending the money of future generations.”
For now, Americans don’t seem to be all that worried about the burden of debt their children and grandchildren will carry.
Earlier this spring, a survey by Pew Research revealed, “[When] asked about 13 different government program areas, from veterans benefits to foreign aid, no more than about a quarter [of Americans] favor reducing spending in any specific area.” Pew added, “As in the past, there is extensive public support for increasing federal funding for veterans benefits and education (72% each). About six-in-ten (62%) support more government spending for rebuilding the nation’s highways, bridges and roads, while 55% each favor more funding for Medicare and environmental protection.”
That, in a nutshell, is why our political class isn’t feeling the heat to tackle our growing debt.
And then there’s the tired back-and-forth of Democrats believing that raising taxes is the best way to boost the economy while Republicans seek to lower taxes to accomplish the same goal. As Kimberly Amadeo argues, “Both sides lost focus. They concentrated on the debt instead of continued economic growth. Whether you lower taxes or increase spending is not worth arguing about until the economy is in the expansion phase of the business cycle. The most important thing is to take aggressive action to restore business and consumer confidence. This fuels the economic engine.”
That’s true to a point, though the government should spend responsibly within its means, whatever the economic situation.
One shiny stone amid this mountain of debt is President Trump’s economic policies, which have boosted confidence, sparked economic growth, and created millions of new jobs. Still, the debt grows larger and more ominous, no matter how low the unemployment rate.
Had the president and congressional Republicans pushed more aggressively for deficit reduction instead of repeatedly raising the debt ceiling, we might be headed in the right direction. Instead, we continue to kick the can down the road, and citizens yet to be born will one day wonder why the richest country in the world couldn’t fund its military, fix its bridges and roads, or prevent an economic collapse that eclipsed the Great Depression.
The debt clock keeps ticking, politicians in Washington keep spending, and Americans keep turning their heads away from a grim reality that will one day come crashing home.