Richard Manning published today an op-ed on Fox News that outlines the state of our nation's finances. We've published an excerpt below, but be warned: it isn't pretty.
Here is the ugly truth.
We are twenty trillion dollars in debt. We have hit the debt ceiling and the federal government is taking what is called “extraordinary measures” to keep us solvent until Congress either balances the budget at current levels or raises the ceiling again.
Of the debt, more than a quarter of that money is owed to ourselves through IOUs issued to the Social Security and Medicare Trust Funds, the Federal Reserve and other intergovernment entities, about 32 percent is owed to governments around the world, including approximately $1.1 Trillion to the government of Japan and $1 Trillion to China, and the remainder is owed to private banks and individual investors in everything from savings bonds to mutual fund holdings of government Treasury bills.
And the situation is not getting better.
The Congressional Budget Office reports that overall federal government spending has increased by approximately $1.13 Trillion over the past decade, while tax revenues have increased by $699 Billion with the result being a more than doubling of our national debt during the previous ten years. To make matters worse, while the national debt has been skyrocketing, our nation’s economy has not grown by more than 3 percent since 2005 which used to be considered normal growth, causing our overall debt to GDP to increase to an unsustainable 107 percent.
Fortunately, we currently enjoy historically low interest rates, keeping total interest payments on the debt at a mere $433 billion, a number which dwarfs every discretionary budget expenditure except defense and is about 70 percent of the Pentagon budget. The most alarming part of our nation’s interest costs, is that they are completely dependent upon demand for our government debt on the open market.
A January 2017 report by the Congressional Budget Office projects, “Because of rising interest rates and, to a lesser extent, growing federal debt held by the public, the government’s interest payments on that debt rise sharply over the next 10 years—nearly tripling in nominal terms and almost doubling relative to GDP.”
Add into this mix, the fact that our military has been stretched well beyond its capacity to fight a two-front war, strained from more than fifteen years of constant war fighting and political choices to defer development of big ticket items like a replacement for the nuclear weapon carrying Ohio class submarines even though the existing fleet is reaching the end of its effective life, and the only rational choice is to aggressively cut the discretionary budget now.
Trump is trying to cut discretionary spending, but it isn't clear whether or not Congress will accept it. Considering their willingness to "repeal and replace" Obamacare, the situation doesn't look good.
That's why an Article V Convention of States is so crucial to our nation's future. A Convention of States can propose a complete package of constitutional amendments that forces Congress to make the tough spending decisions our country so desperately needs. Click here for more information.