The total cost to the United States for the Iraq war alone is approaching a trillion dollars, and no one doubts that it will exceed that amount by a lot as the medical costs for wounded veterans continue to accrue. Our national budget deficit now exceeds a trillion dollars every year, which the federal government has to cover by borrowing. Our total national debt now exceeds $15 trillion and is greater than our total gross domestic product.
How much is a trillion anyway? A trillion is a million million, a number one followed by twelve zeros. Suppose you had to pay off a trillion dollar debt. Suppose you had to pay interest on that debt and also pay back a million dollars of principal every single day. Paying down the trillion dollars of debt at a million dollars a day plus interest would take how long? Answer: more than 2600 years. That’s right, more than 26 centuries.
The problem is that we’re not paying down our national debt by even a trivial million dollars a day. We’re not paying it down at all. Because our federal government runs a deficit every year, we’re actually growing our national debt and only paying the interest on it, which we have to borrow, further increasing the national debt.
The political debate in America is entirely focused on whether efforts to reduce the annual deficit, i.e. slow the increase in the already huge national debt, should happen sooner or later. There is no serious discussion of ever living entirely within our means and eliminating the deficit entirely, much less making payments to actually reduce the amount of the national debt. How long can we continue down the do-nothing path?
The National Commission on Fiscal Responsibility and Reform in 2010 concluded that, “Our nation is on an unsustainable fiscal path” and “If the U.S. does not put its house in order, the reckoning will be sure and the devastation severe.” The commission concluded that doing nothing could result in interest payments alone on the national debt of nearly $1 trillion per year by 2020.
At the request of President Obama, a bi-partisan majority of the commission made a series of difficult recommendations for cutting defense and domestic spending, reforming and simplifying the tax code, taxing capital gains the same as ordinary income, increasing the federal tax on gasoline, and reducing federal expenditures for Medicare, Medicaid, and Social Security.
Liberals on the commission like Senator Dick Durbin of Illinois agreed reluctantly to the proposed huge spending cuts. Conservatives on the commission like Senator Tom Coburn of Oklahoma agreed reluctantly to the proposed tax increases and reforms. They all risked offending their political bases and endangering their political futures to produce a blueprint for a brighter American future.
And what was their reward for risking their political futures to show Americans the only way forward? Nothing. Their report was dead on arrival, ignored by both political parties, and by both Congress and President Obama. The negative lesson obvious to all is that there’s no reward for being responsible. Our political culture rewards only ideological and partisan purity and inflexibility. The only possible bi-partisan compromises are those combining both increased spending and additional tax cuts, further worsening the deficit and increasing the national debt. See the 2010 budget agreement and the 2011 and now 2012 payroll tax cut.
Here’s the only, and I mean only, glimmer of hope that I see on our desperate fiscal horizon: The report of the National Commission on Fiscal Responsibility and Reform is out there. Thanks to the internet, that blueprint for fiscal responsibility and reform will always exist. If at some future time responsible political leaders emerge who actually want to save the American republic from its growing mountain of debt, there is a place from which to start and take a stand.