Good news: The federal deficit for Fiscal Year 2013, which ends on Oct. 1, will be the lowest since 2008.
Bad news: That gap between Washington’s expenditures and revenues is still projected to be a whopping $670 billion, according to the Congressional Budget Office. Thus, our last five deficits would be the five highest in U.S. history.
And like it or not, they are our deficits — and do add to our record national debt.
Only two possibilities remain:
1) Americans, through their elected officials in Washington, will make the hard choices required to change our unsustainable financial course, or 2) the still-soaring federal debt will overwhelm our nation in the coming decades.
David Walker, U.S. comptroller general from 1998-2008, has long sounded that warning. He recently reiterated it in stern, convincing terms during a lengthy interview with The Associated Press.
Mr. Walker explained that while the officially posted amount of our nearly $17 trillion national debt sounds scary enough, in a practical bottom-line sense, the true scale of our impending financial obligations is much larger:
“If you look at the total liabilities in unfunded promises that the government has made — for future Social Security, for Medicare, for military and civilian pensions — it’s $73 trillion. That’s over $250,000 per person.”
And Americans who have suffered through the nightmare of personally devastating debt — foreclosures, bankruptcy, etc. — should understand this point from Mr. Walker all too well:
“Now the biggest risk that we have fiscally is interest.”
He cites the ominous fact that we are already paying more than $200 billion in interest a year on the federal debt — and that by the Obama administration’s own forecasts, we will pay paying nearly $800 billion in annual interest costs by 2023.
Mr. Walker’s grimly accurate demographic analysis supports his tone of alarm:
“We have an aging society. We have longer life spans. We have relatively fewer workers supporting a growing number of retirees. In 1950, we had about 16 people working for every person drawing Social Security. Today, it’s 3 to 1, and by 2035, it’s going down to 2 to 1.”
Those long-term numbers cast a dark shadow on the U.S. economy’s modest, short-term gains over the past year.
They also raise serious questions about America’s continuing ability to serve as a global policeman, even as President Barack Obama gained more congressional support Tuesday for military action in Syria.
Yes, the stock market has climbed sharply and hit all-time highs over the past several months. Yes, the housing market has bounced back a bit.
Still, far too many Americans remain jobless.
And far too many elected officials appear terminally clueless about the intensifying fiscal crisis. While they fuss and fret over yet another debt-ceiling boost, they continue to ignore the fundamental menaces to the U.S. government’s financial viability.
Most Democrats, including the president, remain all too reluctant to make deep enough cuts in spending, particularly on the entitlement front.
Mr. Walker: “We spend over twice per person what other industrialized nations spend on health care and K-12 education and yet we get below-average results. So the answer is not to spend more money.”
But though Mr. Walker endorsed Mitt Romney for president last year, he also fairly faults Republicans. He stresses that Washington will never gets its balance sheet in order until Congress reforms “our tax system to make it simpler, fairer and to generate more revenues,” adding, “Until you do that, you’re re-arranging the deck chairs on the Titanic.”
And until Americans demand an overdue course change, we will keep steaming toward fiscal disaster.