Deloitte Releases Report on the Federal Debt
Today, the consulting firm Deloitte released a report on the scope and consequences of our federal debt. Deloitte, like the majority of researchers, has found that our debt is not sustainable and on its current path, will cause economic harm. Deloitte has five different arguments in the paper, all with their own implications for both the public and private sectors of the economy.
- The debt crisis is likely bigger than you think
- The magnitude of the debt is highly sensitive to economic fluctuations.
- Debt could adversely impact American competitiveness.
- Rising debt could impact the independence of monetary policy
- Demand for and composition of America's debt isn't just America's decision.
Deloitte also correctly points out "the silent cost of interest" when they explain that increases in interest payments will likely crowd out other spending in the budget. They quantify examples of foregone spending on different areas of the budget due to growing spending on interest on the debt.
Overall, this report is well worth the read, and it is yet another reminder that we need to enact a comprehensive, bipartisan fiscal plan soon because the consequences of our current path are real.