Erskine Bowles' Message Hits Home
On Sunday, Fiscal Commission co-chair and former White House Chief of Staff Erskine Bowles delivered a speech at American University's School of Public Affairs Commencement. Apparently, the message hit home for Ben Ritz, Chair of Fiscal Policy and Policy Caucus Director of AU's College Democrats. Ritz wrote a blog post yesterday called "Answering Erskine Bowles' Call to Action." His post makes the case to the rest of the AU Democrats to support a comprehensive fiscal plan.
Ritz says that a main reason why one should care about the debt is interest. He explains:
When we accumulate more debt, we end up increasing both the percentage of it that investors want in interest and the total amount we end up having to pay that interest on. And each year that we run deficits, we end up needing to take on more debt to pay the increasing interest, turning it into a vicious cycle of exponentially increasing costs.
What are the ramifications of having to pay so much interest? Primarily, it’s wasted money. Every dollar spent on interest is a dollar we don’t spend on investments in schools, roads, national security, scientific research, healthcare, or the social safety net.
Considering that the debt is projected to rise rapidly if current policy is continued, we will end up finding our budget consumed by interest. But of course, we would likely have a fiscal crisis before our spending on interest would take up too much of the budget as creditors lose faith in our debt. In that case, we would have to enact immediate tax increases and spending cuts, causing severe damage to the economy.
With all that in mind, what's the solution?
Fortunately, there is hope! Erskine Bowles and former Senator Alan Simpson (R-WY) made a bold, bipartisan proposal to avert the disaster in 2010. Their plan was a balanced package that would reform the tax code, reign in entitlement spending, and halt the growth of the military industrial complex- all while preserving the social safety net and the fragile economic recovery. The plan got 11 out of 18 votes (6 Democrats and 5 Republicans) of the commission; a clear bipartisan majority, but three votes short of the threshold needed to force a vote in Congress on the package.
Finally, Ritz points out that the fiscal cliff will provide a political push for comprehensive reform on the scale of Simpson-Bowles. With a lot of provisions in the budget already "up for negotiation" at the end of the year, there is a very real opportunity for a fiscal plan, and that has inspired him to take action to support serious solutions to our nation's debt conundrum and to urge his fellow College Democrats to do the same. He concludes, "I’m ready to answer Erskine Bowles’ call to action; are you?"
This blog post is another example of citizens wanting to make a difference in our budget discourse. Learn more about what you can to get involved here and sign our petition to have the presidential candidates debate the debt here.
The video of Erskine Bowles' speech is below.