Put it on the Credit Card
By Congressman Mike Simpson
“The national debt just isn’t cool anymore.
“It barely got a passing mention in the State of the Union, rarely is discussed in the halls of Congress, and seems to be nearly forgotten by the Idahoans who contact my office. I’ve heard from seven Idahoans this year on debt – compared to the nearly one thousand who have contacted me about immigration in the last few months.
“It wasn’t long ago that the national debt was the most popular kid at the dance. It was the challenge of our times. Republicans and Democrats convened special committees to tackle it; President Obama dedicated significant portions of his State of the Union and entire speeches to it; powerful interest groups formed to build ideas and find consensus to fix it. It was just 2009, in the midst of the recession, when President Obama convened the bipartisan Fiscal Responsibility Summit to bring the country together and highlight solutions. But we never hear about it anymore. So what changed from 2009 to now? Is the debt gone?
“Not quite. In fact, it’s the opposite - it has grown by $7.5 trillion, a staggering 70% increase, and it continues to grow at record rates.
“How can that be possible? The President has bragged repeatedly that deficits have been cut by more than half, and he’s right. His budget released yesterday has a $474 billion deficit, down from the record $1.4 trillion in 2009. But it isn’t as rosy as it seems, and the White House’s claim that we have tackled the deficit is misleading at best. Though it is growing slower than before, the debt is greater relative to the size of the economy than at any time since WWII, and it is projected to begin swelling again, to a monstrous 79% of the economy by 2025. In a huge missed opportunity, his budget does nothing to address the structural flaws generating our enormous debt, nor does it make any effort to balance the budget in the long term.
“In the last few years, the annual deficit has decreased as a result of a combination of spending reductions instituted by the Republican Congress, and increased revenue from the improving economy. But for all the efforts to reduce spending, Congress continues to ignore the elephant in the room eating up 2/3 of the budget and growing at an unsustainable rate. Social Security, Medicare and Medicaid continue to grow as our nation gets older and lives longer. They are paid for on a mandatory basis – meaning we have already committed to pay for them no matter how big they get, even if it adds to the debt.
“But we can’t just cut them. They are contracts made to the American people, and the government must make good on our deal. What we can do is stop paying for them with gimmicks and IOUs. We need to modernize and update our entitlements, and we need to do it now. We also need a reformed tax system to produce the revenue needed to pay for them.
“Tax policies that grow the economy will create more revenue than simply jacking up taxes on the wealthy. We need fundamental tax simplification and reform. Let’s not pick and choose winners and losers in the tax code to score political points, let’s revamp the entire system to benefit the whole economy.
“Presidents Bush and Obama oversaw record spending to cover the costs of the wars in the Middle East and in response to the recession. At the same time we had greatly reduced revenue coming in to the government. We put record deficits on our credit card. Now, the wars are over and the economy is recovering, but we have done nothing to pay off the credit card.
“At some point, the bank comes after its money.”