For years, politicians, talking heads, and academics have assured the American people that we have nothing to worry about -- the massive deficit and growing debt won't have any negative consequences for average Americans.
Like the wizard in The Wizard of Oz, they tell us not to look behind the curtain because "there's nothing to see here!"
But at some point we have to take a hard look at the state of our country's finances, and develop real strategies for getting back on track.
Economics professor and former U.S. comptroller general David Walker took that hard look in a recent op-ed, and the prognosis isn't good.
It has been widely acknowledged that the federal government has lost control of our national finances. Deficits are approaching $1 trillion every year, about 70 percent of the budget is on autopilot, total public debt now exceeds $22 trillion, and total public debt to gross domestic product has almost doubled from 54 percent at the end of calendar 2000 to around 105 percent at the end of calendar 2018, and it continues to rise further.
The truth is that the current budget system is badly broken and needs major reforms. In addition, the Constitution does not provide adequate protections designed to ensure fiscal responsibility and intergenerational equity. Since the beginning of the new millennium, several political and economic figures have stated that we should not be concerned. Recall that former Vice President Cheney said that “deficits do not matter.” In fairness, he may have been speaking politically rather than economically, but it was an irresponsible comment. He also said that the United States would make money on the second war with Iraq. How did that turn out?
More recently, some prominent economists, including Nobel Prize winner Paul Krugman, have espoused a “modern monetary theory.” This theory essentially states that deficits do not matter and assumes the nation can borrow at reasonable interest rates without limit due to our dominant reserve currency status. It assumes that the United States is exempt from the law of prudent finances, and that public and private interests will always have confidence in the United States irrespective of its policies. That is not a prudent or logical assumption. It is also contrary to history.
Walker goes on to propose several solutions that, if implemented, could improve our fiscal security. Unfortunately, all of these solutions are contingent on Congress. Each and every one of them rely on our "leaders" in D.C. to make them a reality.
To hope that Congress will see the light and impose fiscal restraints on itself is also, in Walker's own words, contrary to history. Congress will never shrink its own ability to spend taxpayer money, which is why the people and the states need to step in and take matters into their own hands.
An Article V Convention of States allows the people, acting through the states, to propose constitutional amendments that force Congress to be fiscally responsible. These amendments can include a balanced budget amendment, along with caps on taxing and spending.
Our children and grandchildren are counting on us secure their financial stability. Congress won't act on its own, which is why we must call the first-ever Convention of States before it's too late.
