Opinion: Why the debt ceiling fight matters
The debt-ceiling standoff has people concerned about what will happen if the U.S. defaults on its debt. I certainly hope both sides will come together to avoid this outcome. But it is still worth reminding everyone how incredibly precarious the status quo is, and why something needs to change.
That’s $20 trillion in new borrowing over 10 years. So far, Uncle Sam has “only” accumulated $31 trillion in debt over the course of our entire history. But it gets worse fast. Congressional Budget Office projections show that the federal government will accumulate about $114 trillion in deficits over the next 30 years, which would place our debt at nearly 200% of GDP. Most of this predicted shortfall is due to Social Security and Medicare. Together these programs will consume 11.
A large debt also means higher interest payments. We already spend more on interest payments than on Medicaid, and 17.4% of our revenue goes toward interest payments. These payments will balloon to $1.5 trillion, or 22% of federal revenue, by 2033. Within 30 years, interest payments will consume half of all tax revenues. By then a lot of the spending that people like will be crowded out.
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