In a year or 18 months, it’s probable that America’s top-of-mind
issue will no longer be the terrific economy. Using one of Washington,
D.C.’s favorite words, the public debate will most likely “pivot” to a
threat so gigantic it can no longer be ignored: The looming disaster of
deficits and debt.
The latest signal that our fiscal future will emerge as tomorrow’s dominant issue: The new, bi-partisan budget deal forged by the Senate. The accord not only greatly increases discretionary spending over the next two years, it lifts the baseline for future outlays by double-digits, putting deficits and debt on a far steeper trajectory. Most of all, the measure is proof positive that both Democrats and Republicans, and President Trump, are in denial mode. The parties and the White House are all joining hands to make an already grave situation even worse.
The colossal budget measure passed both the Senate and House on the morning of February 9, ending a several-hour federal government shutdown that started at 12:01 AM. While Trump and Congressional leaders congratulate themselves for reaching common ground and keeping the government funded, their bill’s real legacy will be hurrying the issue of unsustainable deficits from the wing to center stage.
It ensures that two milestones, bound to spook the public, arrive a lot sooner than expected. Deficits will probably reach $1 trillion in the current or next fiscal year, almost double what the Congressional Budget Office had projected less than a year ago for 2018.
U.S. debt is now on track to reach $30 trillion over the next decade. That’s over 100% of projected GDP, well into the danger zone where investors demand higher rates to buy government debt. And if rates do rise substantially, the U.S. will rival the likes of Italy as one of the world’s most debt-ravaged nations.
Read more: Budget: Deficits and Debt to Become a Big Worry Under Proposed Plan | Fortune
The latest signal that our fiscal future will emerge as tomorrow’s dominant issue: The new, bi-partisan budget deal forged by the Senate. The accord not only greatly increases discretionary spending over the next two years, it lifts the baseline for future outlays by double-digits, putting deficits and debt on a far steeper trajectory. Most of all, the measure is proof positive that both Democrats and Republicans, and President Trump, are in denial mode. The parties and the White House are all joining hands to make an already grave situation even worse.
The colossal budget measure passed both the Senate and House on the morning of February 9, ending a several-hour federal government shutdown that started at 12:01 AM. While Trump and Congressional leaders congratulate themselves for reaching common ground and keeping the government funded, their bill’s real legacy will be hurrying the issue of unsustainable deficits from the wing to center stage.
It ensures that two milestones, bound to spook the public, arrive a lot sooner than expected. Deficits will probably reach $1 trillion in the current or next fiscal year, almost double what the Congressional Budget Office had projected less than a year ago for 2018.
U.S. debt is now on track to reach $30 trillion over the next decade. That’s over 100% of projected GDP, well into the danger zone where investors demand higher rates to buy government debt. And if rates do rise substantially, the U.S. will rival the likes of Italy as one of the world’s most debt-ravaged nations.
Read more: Budget: Deficits and Debt to Become a Big Worry Under Proposed Plan | Fortune
