West Virginians handed Donald Trump one of his highest margins of victory and are sending two new allies, Senator-elect Jim Justice and Representative-elect Riley Moore, to Capitol Hill to help implement his economic agenda. A significant element of that agenda must be to stop the unsustainable growth of our national debt.
Years of borrowing – particularly the $18 trillion amassed during the low-interest rate period between 2010 and 2022 – have left our economy, budget, and national security vulnerable. $7 trillion of the spending came in response to crises like the Great Recession and COVID-19 – the type of expenditures that must be made to stave off economic or human disaster. However, the rest reflects an unwillingness by a series of Congresses and presidential administrations of both parties to prioritize spending and offset the cost of new policies with savings (or additional revenue) from elsewhere in the budget.
As a result, we now owe $28 trillion to bondholders from across the globe, including countries with which our strategic interests may not align (China comes to mind). As we look forward to a new administration and Congress, it is essential West Virginians urge this next wave of policymakers to implement strategies to curb debt growth. Balancing the budget in the near term is unrealistic. However, stabilizing the debt as a share of the economy is both necessary and achievable. Allowing debt to outpace our economic growth threatens our financial well-being and our standing in the world. If we hope to remain economically competitive and financially stable, it is time to act responsibly.
This year, interest on the debt alone will cost Americans $892 billion. This is 3.1% of the GDP. At $6,800 per household, this expense surpasses national spending on Medicare, national defense, or all programs for children. Over the next decade, cumulative interest payments are expected to reach $12.9 trillion. As interest payments grow, they squeeze out critical investments in education, infrastructure, healthcare, and the military.
Every dollar diverted to pay down interest is a dollar not invested in America’s future. Every $1 of U.S. government borrowing reduces the total investment in the economy by 33 cents, effectively reducing economic growth and leaving the American people with fewer opportunities. Put plainly, continuing on this ruinous path will leave future generations in a fiscal straitjacket, stifling the growth and opportunities Americans currently take for granted.
High levels of national debt place a significant burden on everyday Americans. Unregulated debt increases inflation and pushes up interest rates, making it more difficult for families to borrow for homes and education and for businesses to invest in boosting their efficiency and output. The decades of fiscal irresponsibility that got us here translate into a tax on every American due to rising costs of essential goods and limits on financial mobility.
Policymakers must set the simple (if not easy) goal of not increasing the debt. In other words, the hole is deep enough; we must stop digging. New spending or tax cuts that are not paid for elsewhere simply shouldn’t be pursued.
The national debt is not a partisan issue. Rather, it is an American issue. We need a Congress and a president willing to set aside political differences and prioritize the long-term health of the nation. Both parties have contributed to the problem and must now be part of the solution.
Fortunately, there is one step that members of the West Virginia delegation can take to begin to address this crucial situation. Early in the new Congress, a bill will be introduced that calls for the establishment of a Congressionally chartered Fiscal Commission made up of 6 Representatives and 6 Senators from each party who would be charged with developing recommendations for putting the country on a sustainable fiscal path and extending the solvency of Medicare and Social Security. Support for the bill does not require policymakers to support the ultimate policy that emerges from the commission. However, it does signal their commitment to finding bipartisan solutions and heading off a true fiscal crisis, which would be a great way to kick off the new Congress.
-Jimmy Harden, Kanawha Co
