The National Debt Is a National Security Issue

March 21, 2024   |   Tags: , , , , ,
U.S. currency with red ink | Illustration: Lex Villena; Midjourney

It's a dangerously addictive habit that threatens to ruin our children's lives and undermine America's national security—and this week Congress finally acknowledged as much, although it remains unclear if lawmakers have the guts to do anything substantial.

No, I'm not talking about TikTok. I'm talking about the $34.6 trillion national debt.

The Senate unanimously approved a resolution on Wednesday calling the debt "a threat to the national security of the United States" and calling expected future budget deficits "unsustainable, irresponsible, and dangerous."

"We have more than doubled our national debt in just ten years," said Sen. Mike Braun (R–Ind.), who sponsored the resolution. "America is moving down a dangerous and unsustainable path of reckless spending and the federal government has yet to take it seriously."

The passage of a nonbinding resolution on the Senate floor is several steps short of actually addressing the federal government's addiction to borrowing—but, as they say, recognizing that you have a problem is the first step toward solving it.

And the approval of that resolution was timely. Later on Wednesday, the Congressional Budget Office (CBO) published its latest long-term budget projections. The report shows that annual budget deficits are on pace to grow from an expected $1.6 trillion this year to $2.6 trillion in 2034, $4.4 trillion in 2044, and $7.3 trillion in 2054.

As a result of those rising budget deficits, the national debt will continue to accelerate upward. The CBO projects that the federal government's debt will total $114 trillion by 2054. The debt is already roughly the size of the nation's economy and is expected to surpass the all-time high of 106.4 percent of gross domestic product (GDP) by 2028. By the end of the 30-year projection, the debt is estimated to reach 166 percent of GDP.

"Such large and growing debt would have significant economic and financial consequences," the CBO warns. "Among its other effects, it would slow economic growth, drive up interest payments to foreign holders of U.S. debt, heighten the risk of a fiscal crisis, increase the likelihood of other adverse outcomes, and make the nation's fiscal position more vulnerable to an increase in interest rates."

Higher interest rates are already having a significant effect on the federal budget. This year, payments on the existing debt will total an estimated $870 billion, which is more than the Pentagon's budget. Debt payments have jumped by 32 percent since 2023, thanks to higher interest rates and a larger pile of debt.

The new CBO report shows that debt payments will be one of the fastest-growing parts of the budget for the foreseeable future, along with the twin old-age entitlement programs of Social Security and Medicare. By 2051, interest payments will be the single largest line item in the federal budget.

If there's a sliver of good news to be found in the new CBO projections, it is that the situation looks slightly less dire than it did last year. That improvement is due to higher expected levels of immigration and stronger estimates of future economic growth—not because of anything that policy makers in Washington have done. (If anything, they seem determined to prevent those improvements from coming to pass, whether by limiting immigration or regulating the economy more strictly.)

We should also keep in mind the usual caveats here: The CBO does not account for the possibility of recessions, natural disasters, wars, or other unpredictable events that could cause the federal government to borrow more heavily than current law expects. The past 30 years have included 9/11, the war on terror, the Great Recession, and the COVID-19 pandemic, so it seems pretty likely that the next three decades will include at least a few emergencies that drive deficits higher.

"There is no way to look at these eye-popping numbers without realizing we need to make a change," Maya MacGuineas, president of the Committee for a Responsible Federal Budget, which advocates for lower deficits, said in a statement about the CBO report. "And yet we have lawmakers promising what they won't do: I won't raise taxes, I won't fix Social Security, I won't pay for all the things I do want to do. And so we continue on this dangerous path."

Indeed, on Thursday, Speaker of the House Mike Johnson (R–La.) told reporters that he supports plans for a so-called "fiscal commission"—which could propose some solutions to Congress' budgeting problems—but only if the agency could not suggest tax increases or cuts to entitlement programs.

That approach guarantees that the federal government will have to continue borrowing heavily to make ends meet. Despite the Senate's declaration that the national debt is a national security risk and the CBO's attempts to sound the alarm about the federal government's fiscal trajectory, there's still a major shortage of elected officials who want to take the problem seriously.

The post The National Debt Is a National Security Issue appeared first on Reason.com.


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