National debt is about to roar back to life as a pressing issue

As a result of an unprecedented debt binge by Congress over the past year, the national debt is about to roar back to...

Posted: Aug 1, 2018 10:14 AM
Updated: Aug 1, 2018 10:14 AM

As a result of an unprecedented debt binge by Congress over the past year, the national debt is about to roar back to life as a pressing issue after years of hibernation.

In 2010, it was among the nation's top concerns. President Obama created a bipartisan national fiscal commission to come up with a plan to address it, but a big agreement ultimately failed.

The debt didn't go away. It has been growing by the second ever since, and the dominoes are about to start falling.

The recent GOP tax cuts and bipartisan spending increases together will add $2.3 trillion to the national debt in the next10 years. If both are made permanent, that amount goes up to $5.1 trillion. And President Trump is already considering another $100 billion of capital-gains tax cuts.

These sums accelerate a coming fiscal freefall and will push the nation over a psychological barrier as soon as next year: trillion-dollar annual deficits.

The last time we had trillion-dollar deficits was during the Great Recession, and it was the understandable outcome of a huge economic downturn. This time it is purely self-imposed, resulting from irresponsible policy choices. And Washington is responding to trillion-dollar deficits by increasing them further with more plans for tax cuts and spending, with nary a peep about how to pay for them.

Several weeks ago, the Congressional Budget Office laid bare in its annual long-term outlook the dire picture, and the next 15 years won't be pretty. Here is how it will play out, if nothing is done.

In 2022, the Highway Trust Fund will run out of full funding. In 2026, the Medicare Hospital Insurance Trust Fund follows. In 2032, the Social Security trust fund surpluses run dry, and all beneficiaries regardless of age or income level will face a 21 percent across-the-board benefit cut. Before 2030, we could have trillion-dollar annual interest payments. Interest rates have been low until now, but that is changing. As rates go up, we have to pay more on new debt and on all accumulated debt.

The amount we pay in interest on the debt is set to triple over the next ten years. But if interest rates rise just 1 point higher than expected, the government will owe an extra $1.9 trillion over 10 years.

This is a multi-trillion dollar problem, one hard to even quantify. And Congress recently couldn't even agree to cut $1 billion of unspent federal money, which amounted to loose change in the sofa cushions in terms of the federal budget.

These aren't just eye-popping numbers -- there are real, heartfelt consequences for average Americans.

High debt pushes up interest rates, which translates to higher payments on mortgages, car loans, and credit card debt. Because debt is rising, rather than stable, in 30 years, a family with a $300,000 mortgage can expect to pay approximately $45,000 more over the course of the mortgage.

Interest also means less money for the rest of the federal budget. By 2023, we'll spend more on interest payments than Medicaid or defense. All priorities of all politicians will fall victim. The federal assistance that states rely on will be increasingly uncertain, and social safety net programs will be under pressure.

When the debt doomsday actually arrives is anyone's guess. We are entering uncharted waters. The highest the national debt has ever been as a share of the economy is 106 percent -- immediately after World War II. We are on track to surpass that in 16 years, and debt will overtake the size of the entire economy as soon as 2027.

At the turn of the 21st century, we were on track to actually pay off the debt. Then there was a massive terror attack, two wars, tax cuts and new spending programs, a Great Recession and multiple natural disasters. During a strong economy, we should be preparing for future events such as those, not pushing the credit card to the limit.

One thing is for sure -- Washington needs to grow up. Stop the demagoguery. Make some adult decisions. These numbers are so large that the solution cannot be solely spending cuts or tax increases. Both parties will need to compromise to find a path forward.

New York Coronavirus Cases

County data is updated nightly.

Cases: 2502914

Reported Deaths: 55935
CountyCasesDeaths
Kings33129910834
Queens31382710273
Suffolk2379593585
Nassau2133533285
Bronx2067916745
New York1673084632
Westchester1433102338
Erie1052151938
Richmond882931930
Monroe832991179
Orange57074909
Rockland52800779
Onondaga51242755
Dutchess35358497
Albany30443385
Oneida28265581
Broome24026401
Niagara23713397
Saratoga19975197
Ulster17148277
Schenectady16478227
Rensselaer14570165
Putnam1240596
Chautauqua12248171
Oswego11382111
Chemung10683152
St. Lawrence10282124
Steuben9929173
Ontario9224110
Jefferson861274
Cayuga8562107
Sullivan836283
Wayne798284
Cattaraugus7546110
Genesee6871132
Herkimer6646123
Clinton660338
Tompkins642559
Fulton6207102
Madison6072101
Montgomery5848137
Livingston562571
Warren534581
Cortland525879
Tioga498071
Columbia4957111
Chenango461986
Washington451966
Allegany451795
Otsego451154
Greene433085
Wyoming432657
Orleans426587
Franklin415320
Lewis353738
Delaware349545
Seneca270863
Schoharie226221
Essex222431
Yates157726
Schuyler149316
Hamilton4343
Unassigned14424
Out of NY0309
Utica
Cloudy
48° wxIcon
Hi: 51° Lo: 42°
Feels Like: 46°
Oneonta
Cloudy
43° wxIcon
Hi: 51° Lo: 42°
Feels Like: 39°
Herkimer
Mostly Cloudy
48° wxIcon
Hi: 54° Lo: 42°
Feels Like: 46°
Old Forge
Mostly Cloudy
48° wxIcon
Hi: 49° Lo: 37°
Feels Like: 46°
WKTV Radar
WKTV Temperatures
WKTV Severe Weather
NEW Game Day Deals each week
Chapter Aesthetic October Giveaway
Cool To Be Kind 2021
Looking for work or looking to hire? Check out the WKTV Job Fair!
Saluting Those Who Are Proud 2 Serve