JILL NELSON, HOST: Today is Tuesday, October 23rd. Good morning! This is The World and Everything in It from member-supported WORLD Radio. I’m Jill Nelson.
MARY REICHARD, HOST: And I’m Mary Reichard. Next up: Cal Thomas on a proposal to fix the nation’s debt crisis before it becomes an economic disaster.
CAL THOMAS, COMMENTATOR: As difficult as it may be to believe, there was a time when Republicans were known as the anti-debt and balanced budget party. Now, the GOP prefers to tout low unemployment as the debt soars. They are co-conspirators in its rise.
It’s not that Republicans (and once-fiscally responsible Democrats) lack a way out of debt. They simply lack the will. Both parties, but especially Republicans, fear a backlash from voters if they cut spending, much less make actual reductions.
How bad is it, and what can be done about it?
It’s this bad: The Treasury Department and Office of Management and Budget announced last week that in fiscal year 20-18, the federal deficit rose to its highest level in six years, 17 percent over the previous fiscal period. That’s an increase of $779 billion dollars. The national debt is over $21.5 trillion dollars and counting.
The federal government is hardly starving for revenue. Washington collected a record $1.68 trillion dollars in individual income taxes in fiscal 2018, but the money always goes out faster than it comes in.
Brian Riedl of the Manhattan Institute, a free-market think tank based in New York, has written a proposal which, if adopted (and that is highly questionable given the hyper-partisan atmosphere in Washington), could avoid a coming fiscal disaster.
First, the problem, which everyone knows, but few will face: One-third of baby boomers have already retired, and another one-third will retire over the next six years. Those retirements will help push the Social Security and Medicare systems into a $100 trillion dollar cash deficit over 30 years. That will prompt a debt crisis that Riedl warns will, quote—“profoundly damage the country’s economic and social order.”
His solution: A mix of spending cuts and tax increases that will stabilize the national debt to about 95 percent of Gross Domestic Product.
Democrats won’t like any tampering with Social Security, Medicare, and Medicaid, which they have used as a political weapon against Republicans for decades. Republicans won’t like even the small tax increases Riedl proposes, but maybe that is why this plan will work.
The biggest problem, though, is that too many Americans have an entitlement mentality, the notion that government somehow owes them something. For some, government has become a first resource, instead of a last resort. Industry and personal responsibility are character traits from a distant past, if people can even remember those days.
The notion that government owes us is a difficult concept to break, but someone has to begin the process, or the economy faces a bleak future.
Politicians in both parties can’t say they haven’t been warned, but perhaps they believe they won’t be around when the buck not only stops, but crashes, as it inevitably must.
For WORLD Radio, I’m Cal Thomas.
(Photo/Tracy O, Flickr)