In a Wall Street Journal opinion piece, Gerald F. Seib tells us:
If Washington’s leaders need a reason to get serious about the long-term-deficit problem—now—here it is.
There is a cancer eating away at the budget from within, one that steadily drains American wealth, sends much of it overseas and only gets worse over time. It is the interest America pays on its national debt.
This year the U.S. will spend more than $200 billion—roughly the gross domestic product of Chile—merely paying off that interest. That’s nearly as much as it will spend to provide health care to poor citizens through the Medicaid program.
By comparison, the spending debate now raging in Washington, over whether to cut discretionary programs by $20 billion or $60 billion this year, is about chump change, and misses the real long-range threat almost entirely.
That’s because the interest burden gets worse—much worse—as time goes on and spending grows, not so much in the programs now being discussed as on Medicare, Medicaid and Social Security. Without a change, in 10 years the federal government’s net interest bill rises to $928 billion annually. That would be 17% more than the government would pay to provide health care to the elderly through Medicare that year, and 82% more than the cost of all non-security discretionary spending programs combined.
After that, unless something is done, the interest bill becomes truly debilitating. By 2080, the country would be spending more than 10% of its entire gross domestic product—that is, more than 10 cents of every dollar of goods and services produced—just to pay interest. Over time, this represents a giant transfer of American wealth overseas, particularly to China, where much of America’s debt is held….
This is a “cancer” to the long-term financial well-being of our nation. Ignoring its repercussions imperils us all, Rep. Woolsey.