In anticipation of this year’s disastrous discussion over the national debt, the Peter G. Peterson Foundation produced an infographic that examines what path the United States is on when it comes to increasing federal debt. The foundation is a nonpartisan organization dedicated primarily to fiscal issues and long-term policy solutions.
Even if House Republicans had secured a victory by defunding the Affordable Care Act, publicly-held debt is projected to increase 200 percent by 2043, and exceed post-WWII levels in under two decades. The Continuing Resolution currently at issue would only fund the government for a few more months and a comprehensive, long-term debt reduction strategy appears very unlikely for the 113th Congress.
The culprits for America’s blooming debt problem are numerous, but public programs like Medicare and Social Security are not sustainable in their current forms. The Congressional Budget Office estimates, by 2030, the cost of programs like Social Security and Medicare will double:
Spending on major health programs will increase by almost 70 percent, from 4.7 percent of GDP in 2013 to 8 percent in 2038… The sources of this increase are clear. The baby boom generation is entering retirement, life expectancies are increasing, and average benefits are expected to increase because the earnings on which those benefits are based will also increase. As a result, the spending on benefits will grow faster than GDP.
Michael Peterson, COO for the Peter G. Peterson Foundation, re-emphasized efforts that have been underway to address America’s debt future. Plans like Simpson-Bowles, also called the ‘Moment of Truth Project,’ failed to gain traction with the sitting legislature, but would have charted a course for reducing the long-term debt.
What remains missing from the public discourse is the simple fact that raising the debt ceiling is an economic impossibility. The federal debt will increase for several years to come irrespective of tough rhetoric from Capitol Hill. What can be done, however, is setting the course for a decades-long track to averting unsustainable debt obligations.