Mitch Daniels: Washington’s Wake-Up Call
Mitch Daniels is the president of Purdue University, a former governor of Indiana, a former director of the Office of Management and Budget, and a co-chair of the Committee for a Responsible Federal Budget. He recently wrote an op-ed featured in the Wall Street Journal. It is reposted here.
When I testified on Capitol Hill last week on the subject of the national debt, I found myself in the odd position of hoping our elected representatives would find my testimony of little value because it would strike them as so obvious.
As I told them, they know, or should know, that our federal deficits have been running at historically unprecedented levels, so much so that another half-trillion dollars this year was met with a yawn. They know, or should know, that our national debt has reached a peacetime record, and is heading for territory where other nations have spiraled into default, or into the loss of sovereignty as creditors use their leverage to dictate terms.
They know, or should know, that public debt this large weighs heavily on economic growth, crowding out private investment and discouraging it through uncertainty. And that much faster growth than today’s is the sine qua non of the greater revenues necessary to meet federal obligations, let alone reduce our debt burdens.
They know, or should know, that the unchecked explosion of so-called entitlement spending, coupled with debt service, is squeezing every other federal activity—from the FBI to basic scientific research to our national parks to the defense on which the physical survival of the country depends.
They know, or should know, that the problem is getting worse, and fast. Even if reform began today, past overpromising and demographic realities mean that the entitlement monster is going to devour accelerating amounts of additional dollars, all of which are scheduled to be borrowed rather than funded honestly.
They know, or should know, that official projections of growing indebtedness—even the appalling estimates I just referred to—are built on a foundation of wishful thinking: productivity assumptions are too high, interest rate assumptions too low; growth too high, spending too low. As each of these is proven unduly rosy, more zeros will be added to the bill we hand to the young people of this country. So let me offer an appeal on behalf of those young people and the new Americans not yet with us. The appeal is for a shift in national policy to the growth of the private, productive economy as our all-out, primary priority. And for decisive action soon that begins the gradual moderation of unkeepable promises and unpayable debts that will otherwise be dumped on coming generations.
A national government that, year after year, borrows enormous sums and spends them not on genuine investment in the future but on current consumption, passing the bill down to others, pretending that the problem is smaller than it really is, lacks not only good judgment but integrity. It is not hyperbole to label such behavior immoral. For a long time, people have gone to Congress decrying the intergenerational injustice of this policy, yet things keep getting worse.
A near-decade of anemic growth and the weakest postrecession recovery on record has eroded Americans’ economic optimism. A 2015 Rasmussen survey found that nearly half (48%) of likely voters “think America’s best days are in the past.” As this new pessimism has deepened, it has turned into an ugliness, a meanness, a new cynicism in our national life, with a search for scapegoats on the left and the right.
For nearly two and a half centuries, Americans have shared a resilient determination to be self-governing, to guard against tyranny at home and, on occasion, to resist by force its spread elsewhere. But lately there are alarming signals of a different outlook.
According to the World Values Survey, as reported by Roberto Stefan Foa and Yascha Mounk in the July edition of the Journal of Democracy, in 2011 a record one in four American citizens said that democracy is a “bad way” to run the country, and an even larger number would prefer an authoritarian leader who didn’t have to deal with the nuisance of elections.
When today’s young Americans learn the extent of the debt burden we have left them, they will legitimately question the premises of self-government. When tomorrow’s older Americans finally understand how they have been misled about the nature and the reliability of our fundamental social welfare programs, it may be the last straw breaking the public confidence on which democracy itself depends.
In fairness, a few members in each political party have tried to address the coming crisis. To them, all thanks and credit. To those still in denial, or even advocating steps that would make our debts even higher, please reconsider. Your careers may end happily before the reckoning. Your re-elections may not be threatened by your inaction. But your consciences—and what Lincoln called “government of the people, by the people, for the people”—will be.
"My Views" are works published by members of the Committee for a Responsible Federal Budget, but they do not necessarily reflect the views of all members of the Committee.