Throughout its history, the federal government has properly used debt to help overcome threats to the nation and to build necessary and long-standing 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.
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 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.
One major consequence of this huge accumulation of debt has been the harm it is causing to the American economy. Out-of-control deficit spending and debt are undermining the private sector, business expansion and the creation of new jobs.
The current debt stands at $16.4 trillion, 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 build an inch of federal highway, or inspect our beef, or fund basic R&D to help discover a new lifesaving drug — it must first pay the interest on its debt to the people, entities and nations that have lent us money.
This year, the American taxpayer will pony up $224 billion just to pay that interest on our growing debt. That’s over $1,850 per American household — this year alone. In the five years after 2018, the Congressional Budget Office has estimated that the interest cost will be $30,000 per current household over that five-year period.
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 lenders.
This is not a partisan issue. Both major parties have helped create that debt. Washington has been unwise, irresponsible and greedy.
The real questions are: Do the American people have the wisdom Washington lacks? Will the American people demand that the 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?
Tonight, President Obama will address many issues in his State of the Union address. 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.
What he won’t address — at least honestly address — is 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.