Remember when we used to be worried about the national debt?
Paul Ryan, the retiring speaker of the House of Representatives, used to hit the campaign trail with a prop: A clock that showed the mounting national debt. (A version of this is on the website of Oregon U.S. Rep. Peter DeFazio.) These gizmos are kind of fun to watch: It doesn't take long at all for another million to be added to the total.
Nowadays, it seems out of fashion to worry much about the national debt. Certainly, Ryan seems to have left the ranks of those deficit hawks in Congress. Some of those hawks remain, but expressing alarm about the deficit these days is lonely work. No one wants to hear this.
But we need to hear this: By 2020, just two years from now, the nation's annual federal deficit is due to surpass $1 trillion, according to projections released this month by the nonpartisan Congressional Budget Office. That's a big number.
When you start looking at the size of the total federal deficit, though, you really get into some eye-popping numbers, numbers so large it's hard to figure out ways to put them into some kind of meaningful perspective. Here's one way to think about these numbers: Let's say it will take you five minutes to read this editorial. During that time, the national debt will increase by roughly $7 million. By 2023, interest payments alone on the debt will outstrip what we spend on the military.
Here's another way to think about these numbers: According to the Congressional Budget Office, the total national debt (which recently exceeded $21 trillion) will soar to more than $33 trillion in 2028. By then, just 10 years from now, the amount of debt will just about match the size of the United States economy. Or, to put it even another way: The national debt in 2028 will reach 96 percent of gross domestic product.
That 96 percent figure will be the highest percentage since just after the end of World War II. Back then, as you may recall, we had just finished fighting in an expensive world war.
What have we been spending on these days?
Well, pretty much everything. We've spent on social programs. We've spent on our national defense. We've spent (not as much as we should) on the nation's infrastructure.
Most recently, we've spent on a big tax cut that President Donald Trump and Congress pushed through. It's much too early to assess all the impacts of this tax reform, but you might recall that one of the arguments proponents made was that cutting taxes would help drive economic growth, and that growth would more than make up for lost tax revenue.
The Congressional Budget Office tossed cold water on that argument in its recent estimates: It said that the tax overhaul, which includes permanent tax cuts for corporations and temporary ones for individuals, will increase the economy by an average of 0.7 percent a year over the next decade. That growth doesn't come anywhere close to covering the costs of the tax overhaul, which will add $1.8 trillion to the deficit over the same period.
Proponents also argued that last year's tax reform will help boost economic growth over 3 percent annually for a sustained period; if that happens, that would cover the cost of the tax cuts. But the Budget Office expects the economy to grow at an annual rate of just 1.9 percent over the last decade, increasing the red ink.
Some economists worry that the debt will drive up interest rates, raise borrowing costs, cripple the stock market and slow the economy — which, of course, would only increase the deficit.
Those don't seem to be worries shared by President Trump or most members of Congress. But it's foolhardy to keep ignoring them — and to pretend that these are debts that never will come due. (mm)