Will we bill-cluster our way to a debt-driven doomsday?
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It's a $35 trillion problem that threatens to squash the economy, yet hardly anyone is talking about it.
It wasn't discussed during the recent presidential debate and neither establishment candidate ever seems to mention it. Yet…
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It threatens millions of lives
The "it" is the national debt, and the lives it threatens are the millions of Americans who rely on Social Security and Medicare for their health and daily sustenance.
The feds must already borrow to fund Social Security and Medicare. There aren't enough current workers to fund these programs through taxes. Even worse...
Interest expenses on past borrowing cost almost as much as Social Security and Medicare do. These things are happening because America has...
A huge demographic problem
People aren't having enough children to maintain a viable population balance. We have an increasing number of retirees and a declining number of workers. This will require more and more borrowing to sustain.
But what happens when interest on the debt consumes most of the taxes people pay?
Or what if people stop loaning money to the federal government?
If you think these problems won't affect you if you're young or have sufficient savings, then you'd be wrong. These problems will hit you hard!
The politicians will need to borrow tens of trillions to fund future Social Security and Medicare obligations. That money will not be available to do other things. In other words...
Money loaned to finance Social Security and Medicare cannot be used to fund economic production. Instead, those dollars will fund consumption spending by non-working retirees. This will put downward pressure on productivity and upward pressure on prices, especially for health care. And that's not even the worst part.
What will politicians do if people stop loaning them money?
Do you really think the politicians will end or reduce Social Security and Medicare benefits to the elderly voters who elected them? Think again!
The benefits will continue, either by increasing taxes dramatically, like in Europe, or by inflating the currency, or both.
So get hip! Young people will pay both higher taxes and higher prices unless something is done to curtail the debt problem soon.
Can anything be done?
Here are six possibilities
- Increase legal immigration to improve America's demographic balance
- Cut discretionary spending to almost nothing
- Cut defense spending dramatically
- Reduce Medicare benefits
- Raise the retirement age
- Means-test both Social Security and Medicare
Alas, the problem is so bad that it will probably take all six of these to do the job. But right now we're going in the wrong direction.
- Demagogic politicians have persuaded Americans to oppose any immigration, including legal immigration.
- Discretionary spending is rising, not falling.
- Defense spending is rising, not falling.
- Democrats and Republicans both refuse to discuss even small changes to Social Security and Medicare.
Change starts with small improvements
Here's an example of a small improvement. Some representatives, like Thomas Massie, are opposing a new spending bill, because it raises spending rather than reducing it. So far, they're succeeding. Good! But...
House Speaker Johnson is hoping to overcome their opposition by clustering the spending bill with the popular SAVE Act, which would require voters to demonstrate citizenship before voting.
These bills should not be clustered together. They are unrelated. Each bill should pass or fail on its own merits, and we need to know which House members supported or opposed each bill.
This would cause Speaker Johnson to present a bill that spends less!
Our One Subject at a Time Act would do what I just described, ending the bill-cluster to debt cycle. Help us win new co-sponsors for this legislation. Be sure you’re part of The 300 to support the One Subject at a Time Act.
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Set your own agenda,
Jim Babka, President
Agenda Setters by Downsize DC
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