America’s Debt Threatens Our Future

National Security is often a concept associated with physical threats to our Republic. Whether it be threats from overseas, or domestic extremism, politicians often invoke the need for preparedness and vigilance against bad actors and philosophical movements which may undermine our inherent freedoms. However, the fiscal health of our country is just as crucial to the well-being of our nation as any amount of military preparedness or social vigilance.

For much of the last two decades, American government has been on a spending spree funding the Global War on Terror, combatting the Great Recession of 2008, and increasingly expensive domestic programs.

Now, in the age of Covid-19, government spending has surged to unprecedented levels. In short, the debt held by the American taxpayers is out of control. And according to an analysis by the Peter G. Peterson Foundation, it may pose a very serious problem to the future security of our nation.

As noted by the foundation, the country’s national debt was an astronomical $23 trillion. But multi-trillion-dollar bailouts are compounding this like never before:

“Now, our national debt has surpassed $27 trillion. Prior to the pandemic, our public debt was on a path to exceed the size of our entire economy in 10 years, but now we have already reached this unfortunate milestone. At the same time, our nation has suffered considerable economic damage, with millions out of work and steep declines in growth and opportunity.”

Data presented by the foundation also revealed startling levels of federal spending in the immediate aftermath of the Covid crisis and projected future spending:

  • In 2020, federal spending jumped from roughly 21% of GDP to nearly 32% of GDP
  • The Congressional Budget Office projects that spending won’t return to pre-Covid levels of spending until at least 2022

The data released by the Congressional Budget Office notes that the federal government has only collected roughly 15 to 17% of revenues relative to GDP since 2002, the last year in recent memory that the government has collected more than it spent.

Spending more than you earn is a recipe for long term financial disaster. The Congressional Budget Office also released data on debt held by the public. Not since World War 2 has the debt of the United States equaled the GDP. We have now eclipsed that landmark and the office projects that by 2051 the public debt will reach 202% of GDP.

Debt, of course, isn’t free. While we are living in an era of robust spending, interest rates have remained stagnant for years following the Financial Crisis and the net interest on this debt has remained at 2% of GDP for years. This is also expected to rise dramatically over the coming decades, possibly hitting as high as 8.6% of GDP by 2051.

While the federal government has been running up deficits reaching or exceeding one trillion dollars since 2009 during the first Obama Administration, Covid-19 and the subsequent financial disaster it created, has greatly accelerated this debt. The Congressional Budget office reports that the cumulative debt of 2020 alone was $4.4 trillion, roughly 4 times the deficit in the year prior.

Ultimately, the spending done by our government has been irresponsible at best and disastrous for the future of this country at worst. Such staggering levels of debt mean that sooner or later, a generation of Americans will need to “pay the piper.” Will cuts be made to our military? Will our rapidly aging population be denied the social security benefits they have paid into their entire lives? Or will the cost-of-living spiral out of control as this country continues to print money hand over fist to stimulate an already indebted economy that has now been decimated by a pandemic?

America’s debt is out of control and unless the country makes addressing that fact a top priority, we will increasingly be chained to it. The country owes it to future generations and the future of America to confront this problem before it is too late.

Grassroots Pulse covers public policy and political issues aimed at engaging highly-active policy makers, donors, and grassroots leaders at the forefront of the political process in America today.

Image Credit: Photo by Alexander Schimmeck on Unsplash

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