The Washington Post on Why We Must Address Long-Term Debt
Yesterday, the Washington Post Editorial Board published an editorial urging lawmakers to use the looming shutdown as an impetus to come up with a serious response to the long-term debt picture rather than another short-term stopgap. As we have written many times before, the consequences of failing to deal with the long term are dire, a point that the editorial makes clear:
President Obama and his team talk as if they’ve gotten the deficit more or less under control, because the short-term trend has brightened. The federal debt, having soared from 39 percent of the gross domestic product at the end of 2008 to 73 percent this year, is on track to decline to 68 percent by 2018. Thereafter, though, it will begin to rise again, reaching 100 percent of GDP 20 years later. Only one other time in U.S. history has debt exceeded 70 percent of the national economy— around the end of World War II.
The editorial goes on to say that both sides are to blame for the lack of focus on the long-term debt, because neither the Democrats nor the Republicans have been talking about the real root of the problem.
Democrats like to say the country has a “revenue problem,” but the CBO assumes that revenues will rise to 19.7 percent of GDP by 2038, compared with an average of 17.4 percent over the past 40 years, and the deficit widens anyway. Republicans are fixated on Obamacare...[when] the aging population and the relentless growth in health-care costs overall — even accounting for the recent deceleration in that growth — are the main culprits.
Congress can't continue to operate the way that it has over the past three years -- barely averting fiscal catastrophe with last-second short-term compromises. The time has come for real solutions that address the long term. Otherwise, as the Post notes, things will only get more difficult:
Just to keep pace, the government would have to tax more and more, or cut more and more, or both. The longer policymakers wait to address these issues, the harder it will be.