With the federal debt at $34 trillion and rising, Washington lawmakers are staring at a fiscal crisis with the potential to impact the way of life for countless Americans. And unless they act soon, it may be too late.
That’s the message from federal deficit experts like Maya McGuinness, president of the Committee for a Responsible Federal Budget.
“Wars used to be primarily fought on the ground, but now there are economic wars,” she said, pointing out that China, holding $859 billion of America’s debt, is one of the country’s biggest creditors. “We are more vulnerable now than we’ve ever been.”
This Friday, New Hampshire Journal will host a roundtable discussion focusing on the debt crisis and why getting America’s fiscal house in order should matter to Granite State voters. The event will feature former U.S. Comptroller General David M. Walker; state Senate president and former U.S. Rep. Jeb Bradley; and Joe Penland, also known as “Joe From Texas,” a businessman and nationally known deficit hawk.
The event will begin at 2 p.m. Friday at the Millyard Museum in Manchester. It will also stream live on the InsideSources.com YouTube channel.
Walker has said he intends to discuss some topics he raised in a recent op-ed. In particular, the federal government’s recent actions, which he claims are in direct conflict with the U.S. Constitution.
“All the express and enumerated responsibilities for the federal government are in discretionary spending, which is now less than 30 percent of direct spending and is declining,” Walker said. “The federal government has become a bloated bureaucracy that is not outcome-oriented. Federalism has been undermined, and states’ rights have been eviscerated. In addition, the federal government is mortgaging the future of our country and its citizens at record rates.”
But the traditional budgeting done in Congress represents only a small fraction of the real solution, according to Will McBride, vice president of federal tax and economic policy at the DC-based Tax Foundation think tank.
“There’s been a focus on discretionary spending, but it’s the spending for entitlement programs like Medicare and Social Security that is growing exponentially,” he said. “Those are big items driving the debt, and they are on autopilot.
“That conveniently relinquishes Congress from taking any responsibility for it whatsoever.”
The end result, McBride said, could see the United States following the path of Canada in the 1990s, when surging deficits and credit rating downgrades forced the government to significantly curtail spending. A 1995 Wall Street Journal editorial dubbed Canada an “honorary member of the Third World in the unmanageability of its debt problem.”
And “just raise taxes” isn’t the solution, McBride believes.
“We have a broken budget that puts these entitlement programs on an unsustainable course,” said McBride. “All the taxes in the world won’t cover the gap that’s being created by these programs.”
And, McGuinness adds, America’s debt crisis “is absolutely a national security issue. China is playing the long game, and we are not. We have made ourselves unable to respond because we are so vulnerable. We are borrowing from our kids, and, at the same time, we’re leaving behind a world full of risks.”
“When you borrow money from overseas, those countries exert much more power over you,” she told NHJournal. “It should be a deep concern that China has so much of our money.”
As for America’s long-term trajectory, McBride says, “It’s not a question of if, it’s a question of when there’s going to be a budget reckoning.”
According to the Congressional Budget Office, Medicare’s trust fund reserves will be fully depleted by 2030, while the Social Security Old-Age and Survivors Insurance (OASI) trust fund is projected to go bust by 2033.
“We’re not talking about having to put budget caps on discretionary spending; we’re talking about America experiencing a real reckoning with entitlement spending,” McBride said.
For more information about the FITN Debt and Deficit Roundtable on Friday, January 12, click here.