The United States is facing a serious economic crisis due to the significant national debt which currently stands at over $31 trillion, fifteen times more than in 1984. This crisis threatens to damage the country’s financial credibility and, if not addressed soon, could lead to disastrous consequences.
Both political parties share the responsibility for the current economic situation, having failed to implement policies to curb spending and reduce the national debt. President Joe Biden has done little to address this issue, missing the budget proposal deadline for the third year running and refusing to consider a reduction in spending.
The Congressional Budget Office’s recently released report paints a bleak picture of the federal budget for the next decade. Meanwhile, Senate Democrats held their first Budget Committee hearing of the year on climate change, ignoring the pressing need to tackle the national debt crisis.
The national debt continues to escalate, propelled by COVID-19 spending and politicians’ desire to exploit any crisis for political gain. The official scorekeeper of Congress warns that such debt levels could lead to severe economic and financial consequences.
Within six years, the public debt will exceed the record set in 1946. Furthermore, government borrowing is set to increase, and it will eventually outstrip private investment, resulting in slower economic growth and lower wages.
We need to act quickly to address this situation, and President Biden should begin bipartisan negotiations with congressional Republicans. Debt limit action is often accompanied by new budget controls, which is a strategy Biden supported in the 1980s and 1990s. There is no reason to abandon that strategy now.
The Senate Budget Committee needs to adopt regular order and commit to regular appropriations bills, and the appropriations chair and ranking member have already announced their commitment to this. This would help in the restoration of fiscal sanity by providing a clear direction on target spending levels.
Republicans are ready to act, and it’s crucial to safeguard the full faith and credit of the United States. However, if we don’t combine a debt limit increase with meaningful action on federal spending, we will face the same challenges in the future with even fewer options. It’s time to address this critical situation before it spirals out of control.