Why is fiscal responsibility not discussed anymore?
We are fast approaching the midterm elections on Nov. 8. Both parties are working diligently to gain control of Congress. The economy, gun policy, and violent crime rank as the three top issues of concern to voters, as reported by a Pew Research Center poll. A bit further down the list is abortion rights, largely of interest to Democrat voters.
What has dropped off people’s radar for quite some time is the nation’s fiscal state.
Our country is faced with numerous fiscal challenges. Many of them have resulted from inaction stemming from the inability of Congress to compromise. For some politicians, compromise is unacceptable, an admission of failure. Yet, without compromise, the status quo often continues, frequently yielding unfavorable results for all.
Symptomatic of such dysfunction is how Congress uses continuing resolutions (CRs) in place of budgets to fund the federal government. This has been commonplace in almost every year for nearly one-half a century, and there is no evidence that it will change anytime soon. Once the critical time arrives that demands a continuing resolution, or risk of a government shutdown, the two parties come to some makeshift agreement that is typically more costly than necessary and does not serve the best interests of the nation and its people.
The net effect of this dysfunction has contributed to a federal accumulated debt that now exceeds $30 trillion. That is 30 followed by 12 zeroes. To put the magnitude of this number into perspective, it is over 30 times larger than the total wealth of the eight wealthiest people in the United States.
Some of this debt is bookkeeping, like one federal agency owing another federal agency, referred to as intragovernmental holdings. That still leaves $24 trillion owned by the public, including debt to foreign countries like China, a near-peer with whom the United States enjoys a tumultuous relationship.
The problem is that there is no pathway forward to end the growth of this debt, let alone reduce it.
How did we get here?
When representatives of the two parties are unable to reach agreements, often driven by the extreme factions in each party, the paths of least resistance lead to suboptimal choices that do not serve the nation’s best interests. An inability to compromise is also driven by politicians wishing to retain their power and appease their constituents, who may expect ideologically driven policies that encourage “all or nothing” deals.
Inflation is also a concern for voters. What people are paying for food, housing and fuel has jumped significantly over the past year. Inflation has pushed the Federal Reserve to increase interest rates several times this year, which means that the $30 trillion federal accumulated debt will cost more to service as treasury bills and treasury notes are rolled over. Inflation also devalues debt, which would be beneficial if there is money available to pay it down.
So, what can be done to end this spiraling out-of-control fiscal landscape?
Our political representatives will only pay attention to an issue if their constituents care about it. This is how they retain their power. Voters need to escalate the urgency and importance of the fiscal landmines faced by the nation. Without such voter interest, politicians will continue to ignore the actions necessary to clean our nation’s fiscal house.
Asking every candidate running for Congress where they stand on this issue, and how they propose to address it is a critical first step. Without such accountability, the federal accumulated debt will continue to grow, with interest payments to service it taking over a growing share of the government budget.
At some point, drastic actions will need to be taken. It is far better to act sooner than later, making the necessary changes that can avert a fiscal tsunami that few people can envision. The path forward is not a pleasant one to traverse. The path of ignoring it is even worse.
Sheldon H. Jacobson, Ph.D., is a professor in computer science at the University of Illinois Urbana-Champaign. A data scientist, he applies his expertise in data-driven risk-based decision-making to evaluate and inform public policy.