Our National Debt: We Are on Borrowed Time
By Maya MacGuineas
With the presidential candidates crisscrossing the country, we are likely to hear many warnings about our mounting national debt. The numbers are huge and the trends discouraging, especially if we do nothing.
But denouncing the problem is different from doing something about it. We need to press candidates on what they plan to do with debt because once in office, the next president is going to be met with a pile of IOUs that can’t be ignored. Here’s what the next president will be greeted with, and the projected costs by the end of a second term:
- Federal debt held by the public growing by over $7 trillion, rising from $14.4 trillion in during the President’s first year in office in 2017 to $21.2 trillion in 2025
- Annual deficits consistently rising, starting at $455 billion in 2017, increasing to over $1 trillion in 2025
- Federal spending on major retirement and health care programs, and interest on the debt, accounting for 58 percent of spending in 2017, rising to 67 percent in 2025 – crowding out spending on core government functions (such as defense, education, transportation and other “discretionary” spending), which will fall to historic lows as a percent of the economy
We need to look forward to the next election because Washington has lost interest in the debt. With short-term deficits declining, Washington has practically removed the debt issue from the national agenda. Those who don’t want to face up to the huge gap between spending and revenue often point out that deficits have declined by almost two-thirds since 2009 – never mind that they had just grown by 800 percent. But this year’s annual deficit is not the problem. It’s the long-term trends, driven by our aging society and demands on popular government programs.
Our debt is already the highest it has ever been – other than around World War II – and is on course to continue growing as a share of the economy. Still, almost no one in Washington is talking about how to reverse course.
That’s why as citizens we must demand that our next president and other elected officials start looking out for the next generation instead of the next election, and come together to put in place sensible tax and entitlement reforms that would slow our debt, strengthen our economy, and secure our future.
Maya MacGuineas is President of the Committee for a Responsible Federal Budget.