In the midst of the election circus and pageantry, it seems once again fiscal policy issues have taken a backseat. This might not matter if the issue were not of dire importance to Americans and their futures. But on the heels of the new Budget and Economic Outlook released by the Congressional Budget Office (CBO) last week, it has become all too clear that the fiscal issues our country faces are very real and must be dealt with.
Every year, this non partisan analysis of our projected debt and deficit published doesn't mince words- the deficit only continues to get larger. As a result, the debt held by the public has grown by 2 percent since this time last year to a headache-inducing 76 percent of GDP. Just last Friday, the national debt hit an unprecedented $19 trillion. I remember the shock of that number hitting $16 trillion in 2012. By today's debt standards $3 trillion increase seems like a pittance. And it won't stop at $19 trillion. Every year we add about $1 trillion to the national debt and with no end in sight, it's time to address the fiscal elephant in the room with real policy objectives.
It's an issue I've talked about before and it's certainly on American's minds. In fact, according to one Iowa Caucus entrance poll from Monday night, government spending was the top issue for the GOP voters. So why isn't fiscal policy getting the attention during this election to mirror those concerns?
It could be that this isn't an easy topic to speak of and proposing policy initiatives that reign in spending won't win over any friends on either side of the aisle in government. It could be that responsible fiscal policy that balances the budget doesn't make for good talking points along the campaign trail. However, the CBO report is troubling and the implications of the debt affect our economy in a myriad of ways including: slow growth, higher interest rates and taxpayer funds being directed away from public programs and used to pay down the interest on the debt.
The American small business owners who actually create the majority of our country's jobs are aching for a tangible plan on addressing the issues. They are the ones who need to know what they can expect as far as taxes and interest rates. Simply raising taxes puts the burden of the debt on their shoulders and forces them to make tough choices. Choices that often come down often come down to growing as a company or paying higher taxes. When our leaders fail to cut back on spending, the literal buck gets passed down to us all.
The CBO report also estimates that if we continue down this road, our trajectory only becomes more bleak. By 2026, the deficit will reach a mammoth $1.4 trillion. The trouble with out-of-control spending like this is that the train keeps moving even when the tracks run out. History has shows that spending carries its own momentum and once it is outpaced by its revenue source, politicians look to bring in more revenue by raising taxes.
According to the report, growth in spending liabilities such as Social Security and health care outpace growth in revenues over the coming 10 years. What is clear is that our deficit woes are not the symptom of a lack of revenue, they are a symptom of a systemic problem- the government simply spends too much.
It's easy to dismiss the CBO report as lofty economic jargon to be debated by policy wonks in some dark corner booth of a DC watering hole. But it is so much more. Not only do numbers never lie, they tell a bigger story. The $544 billion deficit this year is the price our kids will have to pay at some later date. The 4 percent or $3.4 trillion rise in revenue from this last year to this year is a bakery not adding employees because the increase in taxes didn't allow for growth. When we see these numbers and greater implications on the everyday lives of Americans- it becomes more frustrating to see the topic practically brushed under the rug.
For an issue with such long-term and profound consequences on the health of the economy, the talk on the campaign trail has largely been focused on other issues. It's time for the rhetoric to shift toward what real reforms can be implemented going forward and what meaningful change can be done to ensure that future CBO reports don't appear to be carbon copies of years past. Whoever wins the election will inherit this deficit problem- and with a $1 trillion a year debt problem like this, the American public deserves to hear solutions now.
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