In Reality, Debt Matters. It Matters a Lot

No worries, America. Debt is a preoccupation of the fringe, a
mere distraction for anyone interested in progress. And anyway, as
President Barack Obama explained this week, “we don’t have an
immediate crisis in terms of debt. In fact, for the next 10 years,
it’s going to be in a sustainable place.”
That’s a pretty convenient position, wouldn’t you say, for a man
who’s helped pile on trillions of dollars of new debt and created
an entitlement that promises to escalate this non-crisis crisis of
ours? Problem is that there are a few trillion things wrong with
this contention.
The most obvious hitch is that neither this president—whatever
we think of him or he thinks of himself—nor anyone else, even the
best-intentioned economist or technocrat, can foresee what’s in
store. Judging from our recent history—the wars, economic
downturns, natural disasters, fake emergencies, bailouts,
etc.—there will be plenty of new reasons to create debt we haven’t
accounted for in our future.
And we may keep talking about $16 trillion of debt—bad
enough—but the real number is unknown. Considering all the unfunded
liabilities—things we have already promised and probably can’t pay
for—it’s likely going to be a lot higher.
Then there are near-term political considerations. With the
ideological divide in Washington, no one is going to come up with a
consensus on reforming entitlements—the real driver of debt. (Then
again, tepid bipartisan reform might be even worse.)
Right now, we’re spending more money to pay interest on debt
than we’ll spend on education, homeland security, transportation
and veterans’ benefits combined this year. Surely, there’s
something better to spend that money on. And those interest
payments are a significant tax on Americans—a debt tax that
Washington doesn’t want to talk about. And just wait until interest
rates rise, because at some point they will.
Hey, I didn’t even come up with the previous paragraph. I
cribbed it from a speech given on the Senate floor in 2006 by an
up-and-comer named Barack Obama. He’s so articulate I couldn’t
resist. But those were the stormy days when debt mattered because
Republicans were, well, Republicans.
Left-wing pundits act as if the presidential election was a
referendum on all economic policy—forever—rather than a popularity
contest that has much to do with cultural and very contemporary
concerns. To even talk about cutting spending is to spit in the
face of history’s advance. Well, things change, and if polls are to
be believed, debt matters. Take nearly any poll that gauges the
concerns of the public. For a long time now, jobs and the economy
were leading the list, but second is almost always debt. Green
energy, one of the administration’s big concerns, is not even
close. Neither is gun control. Neither is more regulation. Neither
is immigration. Neither is most of the Obama agenda.
Of course, debt isn’t always a bad idea. We build things for the
next generation, and they should chip in, no doubt. But right now,
public debt is more than 75 percent of gross domestic product. So
when do we get to worry? At 100 percent? Demographics? Right now,
most baby boomers are on the verge of retirement. But don’t
worry.
It would be nice if some reporter asked the president what
happened. Why did debt matter in 2006 but not now? Why in 2009 did
the president promise to cut the deficit in half if it’s nothing to
fret over?
He was right then, not now. And surely, even he can’t argue that
our situation has improved. Actually, reality rarely holds him
back.

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In Reality, Debt Matters. It Matters a Lot


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