T
The truth is, getting into it took decades of sustained effort by poli- ticians of both parties, cheered on by most of the citizenry. Americans like spending money, and Americans don’t like paying taxes. Baby boomers will break the So- cial Security and Medicare banks? “That’s way in the future; we’ll worry about it later.” The U.S. will wage multiple
wars without raising revenues to pay for them? “We’ll hope they’ll be short wars.” Seniors need pharmacy coverage,
doctors need larger Medicare pay- ments, and the middle class needs tax relief? “Those are important; let’s do them, and we’ll borrow the money as needed.” The military and veterans’ com-
munity contributed, too, by pushing benefit upgrades including TRICARE For Life, concurrent receipt, and the Post-9/11 GI Bill. All were needed urgently, and Congress approved them with waivers to normal funding requirements — meaning they, too, were funded with borrowed money. This has resulted in a national
debt of more than $13 trillion — a number so vast it’s difficult to grasp. The nonpartisan Congressional Budget Office (CBO) helps put it in perspective by expressing it as a percentage of the GDP (the total
5 2 MI L I T A R Y O F F I C E R O C TO B E R 2 0 1 0
HE DECADES OF DENIAL were great while they lasted. But now the budget and deficit chickens are coming home to roost, and everyone is wondering how our country managed to get into this mess — and how it’s going to get out of it.
value of all goods and services pro- duced in the U.S. in one year). At the end of 2008, the national
debt was 40 percent of the GDP. At the end of 2010, it’s projected
to be 62 percent of the GDP — higher than during any period in modern history except during World War II. And that’s the good news. The bad news is — using a very
conservative projection of spending versus revenues (i.e., significantly constraining spending on most gov- ernment programs, including defense; allowing Medicare doctor payment cuts; and allowing most tax cuts to expire) — the national debt will rise to 80 percent of the GDP by 2035. The worse news is if today’s most politically popular moves are ad-
opted (Medicare doctor payments are allowed to rise gradually, most tax cuts are renewed, etcetera), the debt will grow to 87 percent of the GDP by 2020 and to 185 percent by 2035 — far surpassing the 1942 re- cord of 109 percent. For comparison purposes, the national debt of Greece, whose threatened bankruptcy prompted a European market meltdown this past spring, was 115 percent of that coun- try’s GDP at the time. How can this be happening in
America? And how did the national debt go from 40 percent to 62 per- cent of the GDP in two years? The answer is the massive eco- nomic crisis of the past two years that raised fears of a new depression
Deficit Commission Members
Cochairs: Erskine Bowles, Clinton White House chief of staff, and former Sen. Alan Simpson (R-Wyo.) Senators: Max Baucus (D-Mont.), Tom Coburn (R-Okla.), Kent Conrad (D- N.D.), Mike Crapo (R-Idaho), Richard Durbin (D-Ill.), and Judd Gregg (R-N.H.) Representatives: Xavier Becerra (D-Calif.), Dave Camp (R-Mich.), Jeb Hensarling (R-Texas), Paul Ryan (R-Wis.), Jan Schakowsky (D-Ill.), and John Spratt (D-S.C.) Private individuals: David Cote, Honeywell International chair/CEO; Ann Fudge, former CEO of Young & Rubicam Brands; Alice Rivlin, former OMB director; and Andrew Stern, former Service Employees International Union president
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96