There’s urgency in Washington to fix a problem that’s been a long time coming: America’s fast track to fiscal implosion. In The Heritage Foundation’s just-released, expanded 2011 Budget Chart Book, you can see just how bad the country’s spending problem is and how America racked up so much debt.
Congress is coming to grips with the need to enact reform, in part because there’s a new breed of Tea Party conservatives making their voices heard on Capitol Hill and also because the government has reached the legal limit on how much it can borrow. The Washington Post reports this morning that it’s crunch time in Washington, with legislators and the White House working to find a way to cut $2 trillion from the federal budget by 2021.
Now is indeed the time for them to take action. In roughly 20 years, the typical American’s share of the national debt will more than triple unless Washington gets the nation’s fiscal house in order. Right now, the national debt averages $31,871 for each American—nearly two-thirds of the median household income of $50,255. The Heritage Budget Chart Book illustrates that without any real spending cuts or reforms, debt will surge to $103,827 per American by 2032 and keep rising.
“For younger generations, the story gets worse,” says Alison Acosta Fraser, director of Heritage’s Thomas A. Roe Institute for Economic Policy Studies. “By 2044, each American’s share of the national debt will redouble to $206,771. And it keeps going up after that.”
The expanded version of the Heritage Budget Chart Book contains 42 graphics that portray Washington’s unprecedented levels of spending, deficits and debt. Seven brand new graphics have been added since a 2011 preview edition of the chart book was released in April.
One chart compares President Obama’s 2012 budget with the Heritage plan to fix the debt and cut spending, “Saving the American Dream.” Under the President’s budget, net interest spending on the nation’s debt would more than triple in the next decade. But the Heritage plan balances the budget in 10 years and dramatically reduce the debt to 30 percent of GDP by 2035.
“What comes through strikingly in these graphics is that Washington has a spending problem that must be corrected,” Fraser says, noting that entitlement programs continue to be the main driver of increased federal spending. For example, an updated chart shows how a lack of entitlement reform pushes spending to engulf half of the economy by 2056.
Richard Fisher, president of the Federal Reserve Bank of Dallas, warns of the damage that continued unchecked spending will have on America’s future:
Under both Republican and Democratic leadership, past Congresses have created a fiscal sinkhole that is so deep and so wide, it threatens to swallow up our prosperity and render our economy an abattoir. They have forsaken the most sacred responsibility they have to successor generations of Americans: Instead of passing the torch to our children, they have passed them the bill.
But one need not peer into tomorrow to see the effects that rampant government spending can have on a nation’s economy. Greece is in the midst of a continuing fiscal crisis brought about by years of irresponsible spending—and its woes are impacting world markets among fears of the country’s possible default.
The United States, too, stands at the brink. And as the 2011 Budget Chart Book compellingly shows, short-term fixes won’t solve America’s problems. Unless Congress and the White House address the root of the country’s spending problems—entitlement spending—it will remain on a path to ruin.