Herein lies the threat and the problem: 'Fiscal crisis' warning as deficits rise, debt set to hit $20T next year’ according to the CBO.
While the staggering national debt has virtually never been an issue in the 2016 campaign and amid White House assurances the problem has faded, D.C.’s budget scorekeepers have issued a stark warning that the red ink is growing once again – increasing the likelihood of a full-blown “fiscal crisis.” A fresh estimate from the Congressional Budget Office projects this year’s deficit – the annual budget shortfall – will spike to $590 billion. That’s higher than a previous estimate, and up 35 percent over last year. And the CBO’s numbers show the total national debt hitting $20 trillion next year.
“The likelihood of a fiscal crisis in the United States would increase,” the CBO report said. “There would be a greater risk that investors would become unwilling to finance the government’s borrowing needs unless they were compensated with very high interest rates.”
The report is significant in that it shows the pendulum swinging – after years of falling deficits, the debt continued to increase, touted by Obama, the CBO sees deficits generally rising from 2016 on. The report projected the return of trillion-dollar deficits in eight years.
Neither Clinton or Trump has focused on the deficit so far in the campaign. Trump has called for large tax cuts but hasn't offered much in the way of cutting spending. Clinton wants further tax increases on the wealthy but calls for spending the money on agenda items like infrastructure and free college tuition.
The complacency that lawmakers have shown about debt must end so they can address the troublesome trajectory of deficits and debt. Even Speaker Ryan no longer talks about the debt. The recent budget Ryan helped engineer, adds to the present crisis.
In an editorial, The Wall Street Journal warned the latest estimates make campaign calls for more stimulus even more problematic. “Thanks to ObamaCare and his refusal to reform entitlements, Obama has set the federal fisc on an even uglier path long after he’s left for a tour of the world’s great golf courses,” the newspaper wrote. “CBO says spending will keep rising and so will debt as a share of GDP.”
The total national debt currently stands at near $19.5 trillion. The current interest rate that determines the debt service is at record lows. As the interest rates increase, and they will, the debt service becomes overwhelming. Nobody cares, including Clinton, Trump, and those in the House and the Senate. Not even the American public cares. Instead, all we hear is that we have a need for more and more federal give away programs.
This crisis, and it is that, will not evaporate because nobody pays any attention to it. It becomes increasingly more difficult to solve as it grows while being totally ignored.