The United States must race for economic growth. Both political parties are addicted to spending. We need to tax consumption, not investment. We need to do so because the federal deficit approaches 100% of gross domestic product.

The outlook is bad. It shows deficits are set to rise faster than nominal GDP growth, real growth plus inflation, over the next decade and longer. The central problem here is that demographics drive the deficit. And while the public loves entitlements, it refuses to pay the bill for Social Security and Medicare. Deficits push interest rates higher compounding the deficit problem. More debt requires higher service payments. Deficits crowd out productive investment.