In recent weeks, those who claim America has no debt problem – the "debt deniers"
– have doubled-downed on claims that enough has already been done to deal with our
debt. They argue that the debt will solve itself now that we've enacted modest discretionary
spending reductions through 2021 and raised taxes on the top one percent of Americans.
The debt deniers are wrong, and the truth is we have a long way to go to truly fix
the debt. Here are the top five reasons why:
- The Debt is Still Rising. Despite the deficit
reduction from the Budget Control Act and the American Taxpayer Relief Act, debt
is set to rise from 73 percent of the economy today to 79 percent by 2023. By comparison,
debt levels have historically been below 40 percent.
- A Further $2.4 Trillion in Deficit Reduction Is Needed
This Decade. The Committee for a Responsible Federal Budget (CRFB), a non-partisan
think tank, recently released a study
concluding that $2.4 trillion was the minimum
additional deficit reduction necessary to put the debt on a clear downward path
as a share of the economy over the next decade.
- Population Aging and Health Care Cost Growth Threaten
the Long-Term. The rising costs of Social Security, Medicare, and Medicaid
will drive debt levels up astronomically in future decades – exceeding the size
of the economy in the 2030s and headed toward three times the economy by the time
today’s youth retire. No economy could sustain these levels of debt, and action
will need to start soon so it can be phased in and workers have time to prepare.
- Debt Reduction Is Critical to Economic Growth.
According to a new analysis by the Congressional Budget Office, an independent government
agency, a $2+ trillion deficit reduction package would increase the size of the
economy by nearly 1% in ten years and accelerate long-term growth – creating jobs
for America's middle class. In the short-term, economic growth will be much better
served by gradual and intelligent deficit reduction than blunt across-the-board
- Modest Reductions Won't Do The Job. Some have
called for $1.5 trillion of additional deficit reduction in order to stabilize the
debt. Although this would be a start, it would leave no margin for error if projections
are off, provide no insurance against future irresponsibility in Washington, offer
no fiscal flexibility to deal with future crises, and would almost certainly fail
to stabilize the debt in future decades.
See what happens if we don't do enough to decrease our debt.
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© 2013 The Committee for a Responsible Federal Budget and Fix the Debt Coalition,