Not to sound like a broken record, but people should really be worried that the federal government keeps breaking records for annual deficits and long-term debt.
The Congressional Budget Office projected Monday that the federal deficit this year will reach $897 billion — unprecedented for a time of peace and low unemployment — and that the overall federal debt will continue growing as a percentage of the economy to levels never seen except during World War II.
Worse, these numbers are based on relatively optimistic underlying assumptions, including no forecast of a recession in the next few years. Yet many financial gurus do forecast a recession for the end of this year or in early 2020. If they are right, debt levels will further grow. What’s even worse is the possibility that the debt and a recession could each exacerbate the other, with public debt helping keep interest rates higher than a recessionary economy can afford.
The problems of deficits and debts aren’t mere bad luck. They derive from deliberate policy choices by Congresses and presidents. When lawmakers really work at balancing budgets and cutting debt, as they did in the late 1990s, they actually can do both while the economy booms. But after a few brief years of what can almost be termed discipline earlier this decade, Congress and President Trump went on a massive spending spree just about a year ago. The results will surely haunt the nation for years.
“Lawmakers need to stop the digging, but even that will keep debt growing,” said Maya MacGuineas, president of the centrist Committee for a Responsible Federal Budget, in a statement responding to the new CBO analysis. “They should come up with a plan now while the economy is strong to put our debt on a downward path and phase it in to avoid the much more disruptive choices that procrastination will bring.”
An analysis by CFRB notes, “Under current law, spending will grow from 20.3 percent of GDP in 2018 to 22.7 percent by 2029.” This is outrageous. Congress and the president set the policies that determine spending levels. Nothing forces them to make drunken sailors look thrifty by comparison. But they keep on doing it, willfully and recklessly.
Somehow, some way, this current crop of lawmakers needs to find the fiscal discipline that a Republican Congress and a grudgingly willing President Bill Clinton found in the 1990s. Otherwise, we’re heading toward disaster.
