Through the course of six debates and over a year of campaigning, the subject of America’s mounting national debt has been largely absent from the presidential primary.
But if the crop of candidates genuinely wants to address what’s ailing America, they need to confront this crisis in waiting. And tonight’s GOP debate in Des Moines is the perfect venue.
As of last week America owed $18,941,406,899,252.15. According to a report released by the Congressional Budget Office this week that number will leap to $30 trillion in the next 10 years thanks to a combination of new spending like Obamacare projected uneven economic growth, and recent tax cuts. All this is on top of runaway entitlements like Medicare, Medicaid, and Social Security.
The number is so staggering that it’s an abstraction. And as long as Americas don’t feel any repercussions it will likely remain so. But the bill will come due eventually. That’s because as debt grows, so will the cost of servicing it. As a result important federal budget priorities will have to take a backseat.
For example, in 2014 the federal government spent $233 billion servicing the national debt. That is a relatively low figure historically and it is mostly due to near zero interest rates which make borrowing cheap right now.
But the number is nonetheless massive: this figure is more than the combined budgets of the Departments of Homeland Security and Veterans Affairs. But as interest rates rise and the U.S. borrows ever greater amounts of money, this number is projected to rise more rapidly than any other aspect of the federal budget over the next decade. And when it does, skyrocketing taxes, deep spending cuts, or a default will follow.
Lawmakers can propose cuts to defense and non-defense discretionary spending, but this will have little impact since the amount of money Washington dedicates to these are set to decline. The true driver of our debt is entitlement programs. Demographics will only further complicate this: record numbers of Americans out of the work force and baby boomers retiring en masse means more Americans dependent on Social Security and Medicare and fewer workers to subsidize them.
Democratic Presidential Candidates Hillary Clinton and Bernie Sanders are both pushing new spending programs that will cost trillions of dollars. So we shouldn’t look to them for answers. But Republicans, on the other hand, supposedly the party of fiscal prudence, need to speak up.
Courses of correction include entitlement reforms such as means testing benefits and slightly raising the retirement age, replacing and undoing the damage done by Obamacare and revving up economic growth via spending restraint, regulatory reform, and a tax code overhaul. Whatever the solution, it’s an urgent subject and one that has played too small a role in the GOP primary.
To their credit New Jersey Governor Chris Christie and former Florida Governor Jeb Bush have, respectively, proposed entitlement reforms and policies to greatly propel growth. But the subject of checking the national debt has been only peripheral at best during this campaign season.
Perhaps that’s because the measures necessary to reverse the debt, entitlement reform in particular, are often considered political suicide. But ignoring the coming crisis is a form of national suicide. It’s time for Republicans to explain how they would avoid this calamity. Starting tonight.
served as the 38th Director of the United States Mint from 2006-2011. Moy is the chief strategist for Fortress Gold Group, a provider of gold IRA rollovers and physical U.S. gold and silver bullion coins for direct delivery. Read more from Ed Moy — Click Here Now.
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