Blowing the Roof Off the Debt Ceiling
Our debt keeps rising and no one wants to address the problem
Last week, after much delay, House Republicans narrowly passed a bill to raise the debt ceiling and cut some spending. Implicit in the bill is the fact that the cuts will not address our country’s existing debt since the bill simultaneously raises the debt ceiling, which is the total amount the federal government is allowed to borrow. This shows that neither party in Washington is in any way serious about addressing our country’s massive, and increasingly growing, debt problem. We are hurdling toward a major financial crisis caused by debt obligations, yet virtually no one in power seems to care.
The federal government is already close to 32 trillion dollars in debt. To put this number in perspective, the US GDP for 2022 was about 26 trillion dollars. This means that the federal government owes more than the entire income of every US citizen and then some. This massive debt becomes even more burdensome in a rising interest rate environment as the cost of debt rises. Every year, the interest on the debt increases, and if the debt continues to rise at the nearly exponential rate that it has risen over the last few decades, the interest expense on the debt will alone rival expenses like social security and the military. At some point, we will not be able to afford our bills, which could lead to depression, hyperinflation, or both.
Imagine a family that maxed out all their credit cards and needs to pay some household bills in a month. Now imagine that the family has a dinner table conversation about the problem and one of the parents outright refuses to address the problem’s underlying causes. Going further, the parent demands that the family raise its credit card limits and not only continue borrowing but borrow even more. Now the family not only has a problem, but the problem is getting worse.
Today, that unreasonable family member is President Biden, who told House Republicans that he would veto any debt ceiling bill that includes any budget cuts. Unfortunately, Mr. Biden is not alone in his obtuseness. Every House Democrat is in lockstep with Mr. Biden. The Democratic Party seems to believe that they can borrow their way into a better future by spending the money on government consumption. The problem is that the growth rate on the national debt has exceeded the growth rate of the US economy for decades, so the Democrat’s plan is both wrong in theory and in practice.
As convenient as it would be to blame all of our debt woes on one political party, the other party in Washington deserves nearly equal blame. The national debt, including borrowing from social security, has not fallen since 1957 according to the US Treasury. The Republican Party has had ample time to address the debt issue during those 66 years and they conveniently manage to ignore the problem whenever they are in power. Even now, they play games by proposing some well needed borrowing cuts, but not enough to actually decrease the debt. The Republicans love to give speeches about fiscal conservatism in theory, but they never put it into practice.
Both parties have discovered the dirty little secret in US politics: parties win more elections when they bribe the voters with ever increasing spending. The irony is that they are bribing us with our own money. Eventually, we are going to be forced to pay off the debt, and the money will have to come from us. Our future selves will be paying the debt and the longer we delay, the more painful it will be. The only way to mitigate the pain is to start the borrowing diet now and pay off a small chunk every year until the debt is satisfied. More voters should start demanding fiscal sanity so that we can get honest representatives into office to take this problem seriously and avert the coming crisis.