(Feb. 15) When something spectacularly awful ticks up temporarily to being “only” really bad, that’s not a reason to celebrate.
Such is the case with the short-term decline in the size of the annual deficits predicted for this year. After two years of $3 trillion deficits, the shortfall in fiscal 2022 is expected to be $1.15 trillion. Even that latter number, though, is so mindbogglingly large and fiscally dangerous that it should frighten us all, not make us sigh in relief. This is especially true because the movement vaguely in the right direction is only a one-time anomaly, not a trend.
Once numbers become so big, most people lose a sense of just what those numbers mean. If someone counts aloud every single second, it would take 31.69 years to reach a billion. To reach a trillion, though, would take nearly 32 thousand years. That adds some perspective to the projection that in the next decade, the federal debt will grow from its current record of $30 trillion up to more than $43 trillion. That’s unsustainable.
The Committee for a Responsible Federal Budget, a widely respected, centrist arbiter, laid out the situation in a new fact sheet on Feb. 14. The federal debt held by the public continues to exceed the size of the annual economy, which puts it well into a serious danger zone. (The CRFB calculates the debt-to-GDP ratio at 101%; the total federal debt, including intragovernmental debt, is even worse, exceeding 120%.) And within 30 years, unless Congress finally begins showing fiscal discipline, the federal debt will be fully twice the size of the economy.
Finally, if President Joe Biden’s current high rate of inflation continues, as it looks likely to do after Tuesday’s horrid report on producer prices, and if the Federal Reserve Board boosts interest rates to combat it, then debt will grow even faster…. [The full column is right here.]
