By Ron Johnson
Throughout its history, the federal government has properly used debt to help overcome threats to the nation and to build necessary and longstanding infrastructure. Much of the American Revolution was financed with borrowed money, as were World War II and the Cold War against the now defunct Soviet Union.
The interstate highway system, coastal ports, and the locks and dams that make our inland waterways navigable are examples of valuable debt financed infrastructure. Failure to incur debt to finance these worthy, constitutionally allowed activities would have made the establishment of our prosperous nation more difficult, or maybe even brought our history to a premature end.
But for the past two generations, and particularly during the last 12 years, Washington has begun to pile up a massive and unsustainable level of debt. For the most part, that red ink spending wasn’t used to avert national crisis or to rebuild an aging infrastructure. The deficit spending that built that debt was used primarily to pay for current operations of ever-expanding government in Washington and to fund ongoing government programs.
Washington’s permanent establishment has sold a toxic bill of goods to the American people, who haven’t read the fine print on the back of the contract.
One major consequence of this huge accumulation of debt in Washington has been the harm it is causing to the American economy right now. Out-of-control deficit spending and debt are undermining the private sector, business expansion, and the creation of new jobs.
Another ominous consequence of Washington’s political greed and fiscal insanity is the future direct cost of borrowing all that money. The current debt stands at $16.4 trillion dollars, and Washington has plans to add another $10 trillion to that amount over the next 10 years.
But before Washington can pay a soldier to protect this nation; before Washington can send out a Social Security check or pay a Medicare bill; before Washington can spend a dollar to build an inch of federal highway, or inspect our beef, or fund basic R&D to help discover a new life-saving drug – it must first make certain it can pay the interest on its debt to the people, entities and nations that have lent us money. That’s just a fact.
This year, the American taxpayer will pony up $224 billion just to pay that interest on our growing debt. What does that mean to you? That’s over $1,850 per American household – this year alone.
And here is where it starts to get increasingly scary. The Congressional Budget Office recently estimated that between 2014 to 2018, Americans will pay $1.77 trillion of their hard earned money, just to pay the interest. The Congressional Budget Office then estimated that the interest we all will pay in the five years after 2018 is $3.64 trillion – about the size of our entire federal budget in 2012 and an estimated cost of $30,000 per current household over that five-year period.
Just to remind you again, that money can’t be used for government programs or defense of the nation. It doesn’t even pay off or reduce Washington’s debt. It merely pays interest to our money lenders.
This is not a partisan issue. Both major parties have helped create that debt. Whether you are a Republican, Democrat or independent, the debt impacts you. Whether you are conservative, moderate or liberal, we are all in the same economic boat and we will sink or float together.
Washington has been unwise, irresponsible and greedy. That much is not even debatable. The real questions are: Do the American people have the wisdom Washington lacks? Will the American people demand that the professional political class in Washington kick its addiction to spending money it does not have and stop endangering the economic security of the very people they purport to represent?
On Tuesday night, President Obama will address many issues in his State of the Union address. I can promise you he will try to sell Americans on increasing taxes again. He will talk about “investing in America,”, which is Washington political window dressing for increased Washington spending and future debt.
President Obama will outline more things Washington can do for you. In fact, he’ll declare that these are things Washington should do for you.
What he won’t address – at least honestly address – is the fine print of his contract. He won’t address the massive suffering that will result if this nation does not get its financial house in order. He won’t say that his plans do not include reduced spending and smaller government in Washington. He won’t lay out the problem of debt or how Washington can begin mitigating and then reducing the true cost of that debt and put this nation back on a path of enduring prosperity.calendar