Well that didn’t take long! The 2 year budget-busting spending bill (passed by the U.S. Senate yesterday) recklessly overrides the hard-earned common sense spending limits imposed by prior sequester legislation and, practically speaking, makes the "cash basis accounting" statutory debt limit meaningless from now on. After years of the American People electing leaders to bring fiscal sanity to our nation’s capital, Congress is once again all too willing to feed the “beast” of our National Debt (with higher interest rates) at the expense of future generations of Americans.
With a national debt of over $20 trillion, and unfunded liabilities for Social Security, Medicare, and military pensions totaling tens of trillions of dollars, our federal government will now be returning to deficits of over $1 trillion annually. In the years following the financial crises, policymakers told us that trillion dollar deficits were necessary to stabilize the economy and bring back jobs. Now that our nation’s Gross Domestic Product (GDP) has returned to strong growth and jobless numbers are way down, what excuse do policymakers have now to spend money we don't have and put the resulting debt on the backs of our children and grandchildren?
The grossly inadequate bookkeeping of the Defense Department is the most egregious example of our government’s failure to be financially accountable and fiscally responsible. In 2014, I personally questioned Defense Department officials at the "Reagan National Defense Forum" in California that they had both a budget AND a public relations problem since the Department of Defense had not been able to deliver an auditable set of books to the US Comptroller General at the GAO since 1994. My questioning got their attention but, unfortunately, it has only gotten worse.
While annual interest payments on our national debt have been low in recent years due to historically low interest rates, interest rates continue to rise in the current market and the annual cost of borrowing on our federal debt is growing exponentially. In 2017, the U.S. government paid $269 billion in interest costs. Even before tax cuts and this recent spending bill, the Congressional Budget Office projected annual interest payments to total $818 billion by 2027. This number, incredibly, is larger than the entire annual military budget. And, interest payments do nothing to better the social and financial health of our nation or its citizens. It is becoming clearer and clearer that interest payments on the National Debt represent a shorter and shorter fuse on a “ticking time bomb” that crowds out investments for a brighter American future and robs the American Dream for our children and grandchildren.