This is must read if you really want to understand the problems we are going to face if we don’t deal with the real problems instead of pussyfooting around arguing over deficits:
The ongoing debt-ceiling debate (unlike most past increases of the debt ceiling) has involved negotiations about various avenues to deficit reduction. That’s not only because Republicans have the leverage to demand something in return for raising the limit, but also in large part because the debate comes amidst grave worries about our mounting debt, and warnings from creditors and rating agencies about where it’s headed.
The warnings are based on the unprecedented projected trajectory of the debt. Here is how the CBO sees it going, compared to the scope of our national debt in the past:
The debt will be larger than our entire economy in just a decade (a level we have experienced only once, very briefly, in the immediate wake of World War II) and will continue to grow very quickly into utterly unchartered territory.
The debate about policy changes attached to the debt-limit increase is supposedly about how to avoid this fate. But in fact, the debate has had basically nothing to do with the causes of that trajectory. Because our budget debates look ten years into the future (since congressional budget rules require ten-year budgets), we have been able to sustain the illusion—on the left and on much of the right—that what we’re dealing with is a familiar kind of public finance problem, if on a larger scale than usual: We have had an explosion of discretionary spending in the past few years combined with increases in entitlement spending, and taxes have not risen to match, and so we’re debating whether to cut spending down to the levels of our tax revenue, to raise taxes to match the spending explosion, or to do some combination of the two. That’s the familiar fiscal debate—everybody knows his part, and has basically played that part this year. It’s an important debate. But it is the debate of yesterday’s and today’s debt problem, not tomorrow’s debt problem—not the medium and long-term problem that is the source of that crazy debt trajectory that has everyone worried.
That debt explosion—which will be at the heart of our politics in the coming years—is different and unprecedented, and we have seen in recent months that the Left is completely unprepared to understand it, and the Right (with much help from the indispensable Paul Ryan) is only starting to grasp it.
Simply put, that debate is all about health-care entitlements. And I mean all. Last month, the Congressional Budget Office released its most recent long-term outlook document (from which the chart above is taken), and with it they released the underlying data tables they used to produce their projections (which you can find here). Here’s a quick chart based on those tables, showing the components of federal spending over the coming decades:
The red line consists of the health-care entitlements: Medicare, Medicaid, SCHIP, and the new Obamacare entitlements. The blue line consists of everything else combined—including Social Security, defense, domestic discretionary spending; everything but interest on the debt.
There’s much more so please continue reading at National Review to see how this will unfold. It’s an excellent article and should be read by all Americans. Seriously.
h/t: Mark Levin