Deficit Spending and the Consequences Ahead
For anyone following the economy these days (and who isn’t, given the stock market antics over the past few weeks), the fact that we’re approaching a national debt level of $22 trillion in the very near future is well known. An article posted at www.avpress.com by nationally syndicated columnist Veronique de Rugy, a Senior Research Fellow at the Mercatus Center at George Mason University, focuses on the long-range consequences of this debt level, first discussing the recent run-up to today’s debt level and following that with discussion on its implications for the future.
With the questions “Has everyone gone mad? Where are the adults in Congress?,” Ms. de Rugy cites the extraordinary taxation measures that would be needed to absorb the cost of some of the socialistic proposals in the wind, not to mention the more boiler-plate items, like growth in defense spending. Her article also references the need for reform in spending categories like Medicaid, Medicare, and Social Security, although the truth is that Social Security does not factor directly into the deficit spending equation. In 2018, for the first time in more than three decades, the Social Security’s cash outflow exceeds its incoming revenue (payroll taxes, income taxes, and interest on its cash reserves). Redeeming these obligations to balance Social Security’s books of course would create the need for the federal government to alternately finance that portion of spending, but only to the extent that annual Social Security revenue doesn’t cover benefits paid out each year. Nevertheless, the result would be additional debt accumulation.
Read Ms. De Rugy’s article here. Then, take a look at the Association of Mature American Citizens’ (AMAC) proposal to modernize and reform our country’s Social Security program in a fashion enabling it to maintain its self-funding design for generations to come. The intent of this reform, naturally, is to ensure the program’s solvency, with the Trust Fund operations used to invest reserves remaining intact to handle cash flow fluctuations. Read AMAC’s proposed legislative framework here…