Congress and the White House are gearing up for their latest epic battle over funding the federal government for another 10 weeks. Meanwhile, their fiscal policies have put the United States on a long-term path of increasing debt, rising interest rates, needlessly crimped growth and fewer dollars for many of the programs Americans care about.
That's not the picture the White House generally paints. President Obama and his team talk as if they've gotten the deficit more or less under control, because the short-term trend has brightened. The federal debt, having soared from 39 percent of the gross domestic product at the end of 2008 to 73 percent this year, is on track to decline to 68 percent by 2018. Thereafter, though, it will begin to rise again, reaching 100 percent of GDP 20 years later. Only one other time in U.S. history has debt exceeded 70 percent of the national economy around the end of World War II.
These estimates come from the scrupulously nonpartisan Congressional Budget Office, and they actually underestimate the danger: This is the rosy scenario. That's because the CBO takes Congress at its word that it is going to reduce discretionary spending on defense, homeland security, national parks, education, scientific research and more to about two-thirds the historic average relative to the size of the economy. Unlikely.