Commentary by Jonathan Bydlk, the President of the Coalition to Reduce Spending, a non-partisan advocacy organization dedicated to limiting federal spending. His commentary has been published previously in USA Today, National Review Online, The Hill, and Real Clear Policy. He also has appeared on Fox's STOSSEL, ReasonTV, and The Blaze's Wilkow, and has been profiled by Business Insider and The Fiscal Times.
In late August, President Barack Obama said America “[doesn’t] have an urgent deficit crisis. The only crisis we have is one that’s manufactured in Washington, and it’s ideological.”
While the President is right that the deficit crisis is somewhat temporarily subsiding – though this year’s deficit will be larger than the deficits seen prior to the recession under President George W. Bush, deficits then-Senator Obama decried as far too large – his statement ignores the debt crisis coming down the pike. From Congressional Budget Office Director Douglas Elmendorf on Sept. 12:
"The federal budget deficit has fallen faster than we expected a few years ago, and projected deficits have been reduced relative to what we expected would occur if the policies in place at that time were continued. However, relative to the size of the economy, debt remains historically high and is on an upward trajectory in the second half of the coming decade.
The fundamental federal budgetary challenge has hardly been addressed: The largest federal programs are becoming much more expensive because of the retirement of the baby boomers and the rising costs of health care, so we need to cut back on those programs, increase tax revenue to pay for them, or take some combination of those actions."
And now the CBO's newest long-term budget report notes that under current policy projections, publicly held debt will be nearly twice the size of America’s gross domestic product in 2038 – nearly three times what it is now, as compared to GDP.
There is still hope that a long-term debt crisis can be averted, but time is short. CBO says we need $4 trillion in deficit reduction over a decade to bring our debt-to-GDP ratio down to pre-2007 levels by 2038. We would argue far more is needed, but even $4 trillion (or $400 billion annually) appears far beyond the political will inside the beltway due to re-election concerns. And that is a disaster-in-waiting for the American people.
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