Faced with looming debt, plant seeds of fiscal responsibility

The federal debt continues to grow at an alarming rate, but too many of us are not alarmed. The debt grows with mathematical certainty, yet America has taken a “so far, so good” attitude.

 

From 1981 until today, the nation has gone from less than $1 trillion in debt to today’s $20 trillion. With existing federal tax and spending plans, it will grow to $30 trillion in the next 10 years. That’s right. According to the Congressional Budget Office, we have a $10 trillion debt increase already baked in over the next 10 years.

Yet, the debt has steadily increased with no apparent downside. The stock market is hitting record highs; interest rates are near record lows; the financial markets continue to refinance our expanding debt; and life goes on. Low taxes and generous spending help support the good life. What’s not to like?

What’s not to like is the debt’s devastating damage to our future. This year the interest on the debt is $670 billion. The CBO predicts the interest will more than double to $1.4 trillion in 10 years, largely because of benefits for retiring baby-boomers and rising worldwide interest rates. That much interest would be more than half the personal income tax projected that year.

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This is outrageous! Half of all income tax for debt service? Debt service does not pay Medicare benefits, fund the military or any other benefit.

An even greater problem is an eventual debt crisis. When the financial markets conclude that America’s debt is so high that we are at risk of default, the markets will impose higher and higher interest rates. We will have no choice but to pay because we must refinance maturing federal debt. Lawmakers will then be forced to drastically cut spending and increase tax revenue to get the debt crisis under control.

Today’s spending levels and tax rates will be a distant happy memory. The dollar’s status as the world’s reserve currency will be in jeopardy, and our bonds will no longer be the world’s highest-rated debt instruments.

We will no longer be the world’s largest economy, as growth is reduced by stringent fiscal recovery measures. And we will be unable to continue to fund the world’s most powerful military. As former Chairman of the Joint Chiefs of Staff Adm. Mike Mullen stated, the federal debt is the nation’s greatest national security problem.

Why are we letting this happen? Primarily because getting the debt under control is difficult. We have become complacent -- comfortable with the government spending 15 to 20 percent more than it takes in -- and collectively we don’t want higher taxes and less spending.

There is a near complete lack of political leadership on controlling the debt. Our politicians know that effective steps to fix the debt will be unpopular, and instead of leading, they choose not to address it.

Georgia Republican U.S. Sen. David Perdue is one politician who has been an outspoken critic of the debt. A year ago he said, “If we don’t get serious about solving our debt crisis right now, we will not be able to fully support our national security or domestic priorities.”

William S. Morris III, the chairman of Morris Communications Corp., which owns this newspaper, addressed the debt in the Crossroads for America special section in the Feb. 5 editions of all its daily newspapers. “We go on living beyond our means and burdening future generations with our debt – which is patently immoral.”

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And that is true. Our fiscal conduct is immoral. As responsible adults, how can we leave this looming fiscal crisis to our children and grandchildren? The sooner we start controlling our debt, the more likely we will be successful.

Older citizens like me may not benefit from sacrificing now to avoid a debt crisis in the future. But recall the Greek proverb that says, “A society grows great when old men plant trees whose shade they know they shall never sit in.”

America needs to plant the seeds of fiscal responsibility to remain a great society.

 

The writer is a retired U.S. Navy officer. He lives and writes in Savannah.

 

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