PROGRESSIVE VIEWS
In 2023, I wrote: “The current national debt is a whopping $32 trillion ... the debt continues to grow regardless of which political party is in power.”
Guess what, gross national debt is now $38 trillion and is growing faster than ever after two decades of continued borrowing.
Our debt exceeds current gross domestic product (GDP) by over $7 trillion. GDP is the value of all the goods and services produced annually in the U.S. At this pace we will be adding another trillion dollars every five months.
The non-partisan Peterson Foundation forecasts further debt rating downgrades as the “Big Beautiful Bill” adds $4.1 trillion to our national debt over the next 10 years.
To better understand our debt and find solutions, I recommend looking to The Committee for a Responsible Federal Budget (CRFB). They are a nonpartisan organization promoting sensible tax and spending policies that encourage economic growth and opportunity for all Americans.
CRFB assesses our current situation as bleak: “The reality is that we’re becoming distressingly numb to our own dysfunction. We fail to pass budgets, we blow past deadlines, we ignore fiscal safeguards and we haggle over fractions of a budget while leaving the largest drivers untouched.
“Social Security and Medicare, for example, are just seven years from having their trust funds depleted, and you don’t hear anything from our political leaders on how to avoid such a disaster,” it says.
We are no longer a top-tier credit risk like Germany and Canada. This means higher borrowing costs. We are leaving a bleak legacy for our children who will be saddled with ever-increasing debt and an ever-increasing gap between the rich and the middle class.
Simply put, we have too much spending (23% of GDP) and not enough revenue (17% of GDP). The main components driving spending are rising healthcare costs, an aging population and skyrocketing interest costs. Rising interest costs, which are now as much as defense spending, will squeeze out essential programs and hamper our ability to respond to future economic downturns.
CRFB also strives to address the division, distrust and dysfunction threatening our democracy. Two of CRFB’s advocates who I admire are former GOP congressman and Ohio Gov. John Kasich and former Democratic congressman, CIA director and Secretary of Defense, Leon Panetta. Both are thoughtful leaders and are wonderful examples of how to communicate when we have divergent political views. They both agree that our government must be honest, efficient and effective.
Unfortunately, the ultrarich have way too much power to manipulate the media and government to protect and grow their wealth. They should start paying their fair share. We also have to reduce expenditures and grow our economy to keep the “American Dream” a reality.
Some liberal pundits dismiss the idea that our huge deficit is a problem, and conservative pundits say we must have no debt. I disagree with both. Eliminating the national debt is simply impossible but bringing it under control is essential.
We should stop the rise of the debt as a share of the economy within 10 years and implement a plan to reduce the debt to historical levels in the longer term. Over the last 50 years our debt has averaged 49% of GDP and that would be a realistic target by 2050.
We will need to raise yearly revenue to about 21% of GDP by eliminating most deductions, exclusions, preferences and credits. It would not be necessary to raise tax rates.
At the same time, we must bring spending down to that same 21% of GDP over the next 10 years by freezing domestic and defense spending, reforming healthcare and putting Social Security on a solid footing by reducing benefits to the top 25% of earners.
On the CFRB website you can go to the debt fixer page and develop your own plan if you don’t agree with my suggestions.
Bottom line, we must pressure our elected officials to develop a fiscally sustainable approach to the federal budget. We must not let confidence in U.S. markets further erode, which will cripple economic opportunity for future generations.
To learn more, check out the Kendall County Democratic Party website: kcdems.us.
Kevin Henning is a local Democrat
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