Four years ago, when Republicans gathered in Tampa to endorse Rep. Paul Ryan, R-Wis., as their party’s vice-presidential nominee, it signaled the growing prominence that the debt issue had gained within the party.
For decades, Republicans had sounded alarms about runaway spending, while in practice, they avoided doing anything to reform entitlements — the true driver of the nation’s long-term debt problem.
But as Ryan rose from his position as a rank and file member of Congress to the chairman of the House Budget Committee, his once obscure plan for overhauling the nation’s entitlements and putting the nation on a sustainable fiscal path had been adopted as the official budget of the Republican-controlled House. And by the summer of 2012, Ryan found himself in the number two slot on the national ticket.
Four years later, Speaker Ryan will chair the convention that’s going to nominate Donald Trump — a man who has eschewed the idea of serious entitlement reform.
Trump was able to ignore the issue of the debt during the primary season at little political cost. Republican primary voters tend to skew older, and those voters aren’t eager to reform Social Security and Medicare. He has been able to get away with talking in vague terms about how he would use his business sense to cut back on waste, fraud and abuse — the old standby lines for politicians who don’t want to make a serious effort to confront the nation’s mounting debt.
In the meantime, the economic recovery has been able to bring in enough revenue to make the annual deficit numbers less scary than they were from 2009 through 2012, when the federal government ran deficits exceeding $1 trillion for four consecutive years. But this temporary reprieve in the mid part of this decade was always anticipated and has done nothing to change the dire long-term picture staring back at the nation’s youth.
“If current laws governing taxes and spending did not change, the United States would face steadily increasing federal budget deficits and debt over the next 30 years,” according to a July report from the Congressional Budget Office.
The report noted that the federal debt held by the public equaled 39 percent of the nation’s gross domestic product in the 2008 fiscal year, as the nation was plunging into the deep recession. But it has since ballooned to a new normal that is roughly double, and now stands at 75 percent.
In less than 20 years, the nation’s debt is expected to exceed the value of the entire annual economic output of the United States. Though that distinction has been achieved once before, it was when the nation was spending for World War II, and it eroded over time after the war ended. But this time is different. The nation is expected to continue piling up debt, as far as the eye can see. Within 30 years, debt is expected to reach 141 percent of GDP.
The consequences of this debt would be devastating. It would increase borrowing costs, and thus force lawmakers to choose between defaulting on debt payments or cutting into other priorities. It would give the federal government less flexibility to respond to unexpected events and emergencies — as the U.S. did as it ramped up military spending during World War II. And, as the CBO noted, “A large and continuously growing federal debt would make a fiscal crisis in the United States more likely.”
Once a crisis hits, the next generation will face a brutal decision of whether to pursue drastic, immediate spending cuts and tax increases, which still aren’t likely to be enough to fix the problem — or to plunge further into crisis.
The only way to avoid such a scenario is for policymakers to institute reforms now that can gradually improve the problem over time so it never reaches crisis proportions.
Republicans, in 2016, may have decided to take a pass and ignore this problem. But it won’t ignore our children.
