The U.S. is headed for “the most predictable economic crisis in history,” as Bill Clinton’s former White House chief of staff once put it. Why? Because of the mountain of federal debt that we keep making bigger and bigger.
For the first time since the wartime economy of the late 1940s, U.S. debt is roughly equal to the value of all the goods and services our economy produces in a year. When World War II ended, all that spending on tanks and aircraft came to a quick end. But the major drivers of today’s debt crisis are Medicare and Social Security, and their price tags are set to keep rising. So what does President Joe Biden promise to do about this looming crisis? Absolutely nothing. And Republican lawmakers have cheered him on.
Doing nothing might not be a political problem today, but it will become one as the debt wreaks havoc on the U.S. economy.
We already spend more on paying interest on the federal debt than we do on Medicaid and defense. Even if rates remain at 4 percent for the next few decades, annual interest payments are projected to surpass what we spend on Medicare and Social Security.
Read the entire article and related podcast in Reason magazine.
Brian Riedl is a senior fellow at the Manhattan Institute.