Our Nation’s Mounting Debt Crisis

By all accounts the nation’s economy is booming, with a 3 percent GDP increase a real possibility this year. Were the occupant of the White House not the subject of continuing controversy, millions would be singing his praises.

Aside from the popularity—or lack thereof—of our president, though, I fear a day of reckoning looms over our nation.

I speak of the national debt, the subject of a recent Washington Post story. It told of the son of New York billionaire Seymour Durst supporting higher taxes.

The elder Durst gained national attention nearly three decades ago when he slapped the National Debt Clock on a building he owned just off Times Square. That year, Durst sent each member of Congress a holiday card reading, “Happy New Year! Your share of the federal debt is $5,000.”

That’s mere pocket change today.

Bad Fiscal Policy

Durst’s son, Douglas, spoke up after what he called the worst months he had ever seen for fiscal policy.

“I support higher taxes on people like me,” Durst told the Post. “I think America has more of a revenue problem than a spending problem.”

Anyone who has watched Uncle Sam waste money like water might argue with that statement, but the article included some rather sobering statistics:

• When the National Debt Clock went up, total gross U.S. debt was just shy of $3 trillion, or about $12,000 per person. Now it’s more than $21 trillion, or $65,000 per capita.
• By the end of this year, debt held by the public will top $127,000 per household, with personal debt per household averaging $126,000.
• Debt levels as a percentage of GDP haven’t been this high since World War II.

“I always feel nervous signing a mortgage or a car loan,” David Kelly, chief global strategist at JPMorgan Funds told the newspaper. “I think, can I afford all this debt? Then you realize the government is busy borrowing even more money on your behalf.”

Cause for Alarm

During the mid-1990s, I interviewed a financial expert whose views went opposite the prevailing wisdom—especially in Christian circles—that our national debt was a serious crisis.

One reason for his optimism: the enormous assets owned by Uncle Sam that weren’t being figured into gloom-and-doom calculations.

Besides, he said, we shouldn’t see serious problems unless our debt were to hit the $25 trillion mark. At the time, we had less than $10 trillion of red ink. Now, it’s more than double that.

At the rate we’re going, another few years and we’ll be at my interviewee’s precarious $25 trillion level. I sense cause for alarm.

Addressing the Problem

About a decade ago, I started getting projected benefits, based on when early retirement and two later options.

The Social Security Administration would include a warning that, come 2034, it might only be able to pay three-fourths of the projected sum, unless Congress made adjustments in revenue collections.

At first, that didn’t bother me. As the years have passed with continued dithering over adjustments to funding formulas, I wonder if Congress will finally get around to acting on Dec. 31, 2033.

The same is true of our national debt. I fear that only when the situation becomes too severe to ignore and millions are on the edge of meltdown will we take steps to address the problem.

It won’t be easy or painless, but starting now will sure beat waiting 15 years.