This post reprises some of the points I made a month ago, but it is important, so let me do it again.
The print edition of yesterday’s Chicago Tribune had an article entitled “U.S. debt details you may not know.”* The article said “[t]he U.S. debt burden is starting to decline. That’s right – it’s going down, not up.” The article is right that the Congressional Budget Office projects that the amount of federal debt held by the public will go from 75% of gross domestic product, where it is today, to 71% of GDP by 2018.
What the article did not mention, however, is that 2018 is the low point. After that, the percentage starts going up again. The CBO projects the percentage will be back to 75% of GDP by 2023 and up to 100% by 2038.
The article also did not mention that the CBO projections are based on all current laws remaining in place. That means the amount of the sequester will increase every year. It means the cut in the Medicare reimbursement rate for doctors will actually be implemented, instead of being put off every year. Without these (and more) staying in place, the CBO projects the debt could be close to 190% of GDP by 2038.
In other words, while the article was technically correct as to certain CBO projections, it was substantively misleading. As CBO director Douglas Elmendorf has said, “The federal budget is on a course that cannot be sustained indefinitely.”
The best time
to start fixing the budget, and the debt, is now. By making adjustments to entitlement and other
programs now, we can give people time to plan for the future, instead of
imposing huge cuts at the last minute.
That is what President Reagan and a divided Congress did in 1986. That is what we need to do now.
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* I could not find it online. That is
just the way the Tribune is.
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