Hamilton: The dangers of debt
Politicians and commentators these days like to point to an array of threats to our constitutional system. There's one, though, that doesn't get nearly as much attention as it should: our national debt.
We may not yet be in imminent danger of fiscal collapse, but we're moving into uncharted waters. We are among the most indebted nations in the world, and it's only getting worse. Thanks to our new tax law, we're staring at routine federal budget deficits north of $1 trillion each year — compared to what now seems like a paltry $665 billion in 2017.
As we look at an aging population, rising entitlement costs and skyrocketing interest payments, things promise to go from dismal to dire.
We're running these deficits at a time of full employment, when the economy is doing well. This is exactly the wrong time to be pressing on the accelerator, because when the downturn comes — which, inevitably, it will — we won't have room to maneuver.
The problem is not quite that nobody's talking about the debt in Washington. They are. But it's not a productive discussion. Politicians give lip service to debt and deficit reduction, but for the most part, each party tries to blame the other. Tackling deficits and the debt always takes a back seat to other priorities: tax cuts and spending increases of all kinds and descriptions.
What do we do about all of this? "The time to repair the roof," John F. Kennedy once said, "is when the sun is shining." That's why it's time right now, while the sun is shining on the economy, to repair our fiscal problems.
We need to restrain the growth of spending, especially in entitlement programs. And we need to recognize that this most recent tax cut, with its further explosion of debt, is exactly the wrong medicine.
Debt is a major threat to our preeminence in the world, since it constrains our ability to steer the economy and react forcefully to unexpected events. How we deal with it will be a real test of our constitutional system and our political system.
What we need to do is no secret: we have to spend less and tax more. This is very hard to do. But the system is not self-correcting. Unless Americans demand action, we will continue down our current road until, at some point, the pavement ends and the wheels come off.
Lee Hamilton is a senior adviser for the Indiana University Center on Representative Government; a Distinguished Scholar, IU School of Global and International Studies; and a professor of practice, IU School of Public and Environmental Affairs. He was a member of the U.S. House of Representatives for 34 years.