America faces a growing crisis. Our federal government has accumulated a $13.6 trillion debt over the last few decades, and this debt is expected to grow significantly in coming years. This burden is a drag on our economy. Borrowing more and more would seriously threaten the livelihoods of Americans and our standing in the world. But if we act now, we can set our nation on a new course. America has solved other great challenges in its history. By rising above partisanship and working together, we can make a plan to live within our means and preserve the American tradition of increasing prosperity for future generations.
Here’s how we’ve gotten to this point: The federal government has to borrow money when the revenues it collects are not enough to cover the amount it spends — a budget deficit. Over the last 10 years and at other times in history, our government has run large deficits. During these years, the government has borrowed more and more to make up the difference. Today our accumulated national debt stands at a staggering $44,000 for every person in America.
Of course, like with a credit card, carrying a “balance” is not free. Our government now spends about $200 billion every year just on interest payments, and we get nothing for it. Half of this money goes overseas to foreign countries that own our debt.
That’s bad, but the worse news is that our debt is projected to grow and grow far into the future. This is due to several factors, including the rapidly increasing cost of health care, and the fact that people are living longer and receiving more government benefits. Official government projections show federal debt doubling by the 2020s, tripling by the 2030’s and even quadrupling by the 2040s. That means that unless we change our course, $13.6 trillion could grow to more than $65 trillion.
If America were to borrow this much, interest costs would explode, eventually using up 100 percent of all of the money the federal government takes in and leaving nothing to pay for the things government should do. Interest rates could rise, costing Americans more and more each month on our own mortgages and loans. These costs could even threaten the sovereignty of our country — owing so much to foreign countries could give them unprecedented and unacceptable influence over us.
We all have a stake in solving our nation’s fiscal crisis. And we can all do something about it. By making changes now, we can set America on a new course. We can avoid the risks and pitfalls of our current path, and instead continue the American ideal of increasing prosperity.
Our hopes and dreams for our nation and our children depend on our willingness and ability to act urgently. It’s time to support elected leaders from both political parties who want to do the right thing, and design a plan that helps us live within our means, creates a solid foundation for economic growth, and protects the jobs and welfare of future generations.
PGPF Fiscal Issues Primers: