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CBO’s Warning on the Federal Debt and Deficit

By February 17, 2023Commentary

This is not a Democrat or Republican issue, nor a liberal or conservative one; it is an existential one for the country.  For over two decades the United States has run large annual deficits and has added to the national debt, which has steadily crept up as a percent of GDP.  This happened with Republican and Democrat presidents.  The epidemic, as did the Mideast wars before, became an excuse for just throwing money out Ben Bernanke’s helicopter.  So spending went ballistic, as did annual deficits and total debt, which is now over 100% of GDP.  An underappreciated danger is that during the past two decades while the debt was on its astronomical ascent, interest rates were historically low.  That is no longer the case and it won’t be the case again for an extended period of time.  So the average interest rate across the current book of debt is going to rise and rise as that debt has to be rolled over with higher rates, and we continue to run trillion dollar plus deficits that require new debt issuance.  Won’t be long before we are spending a trillion dollars a year on interest.  A new Congressional Budget Office Report demonstrates in stark terms just how bad our spending and debt problem is.    (CBO Report)

The CBO uses fairly strong language, for it, to discuss the dire situation and suggest that spending changes are needed immediately. (CBO Statement)  But it isn’t strong enough, especially for the whacked progressives who think money just appears magically and they can spend all they want.  The CBO projects as 2 trillion dollar deficit this year, with similar deficits as far as the eye can see.   As long as federal spending creates that kind of deficit, we are going to have high interest rates and high inflation.  Maybe the pain will get to the point where people demand reform, but the reform is needed in all the give-away programs.  Raise the age of Social Security and Medicare retirement.  Cut way back on the bullshit criteria for being “disabled”, which allows young people to collect Social Security and Medicare.  Stop the absurd spending on renewable energy and climate change.  Cut the number of federal employees in half.  That would about do it right there.

But there is no political courage for that, so we are going down, down, down.  Worse and worse quality of life.  I don’t know how bad it has to get before people understand we have to get spending, deficits and the debt under control.  The House Republicans should absolutely refuse to raise the debt limit until a serious spending reduction plan is agreed to.  Every American should be forced to read this report and understand what kind of a disaster we are heading for, but if it can’t be explained on Twitter, TikTok or Instagram, most of them can’t be bothered.  Oh, well, you get what you deserve.

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