Former White House official warns America is on the brink of financial ruin
In just 30 days, the US national debt increased by $215.65 billion.
According to new data from the US Treasury Department, the national debt rose from $34,534,845,450,747 as of May 15 to $34,750,498,829,987 as of June 15.
As of last month, interest paid on the debt had already exceeded the amount spent on defense, health care and Medicaid, and more than the amount spent on veterans, education and transportation combined.
In a new paper for the American Institute for Economic Research, Vance Ginn, former deputy director for economic policy at the White House Office of Management and Budget in 2019-20, argues that America is “on the brink of a fiscal cliff.”
“Such numbers are not just numbers, they represent a looming burden that future generations will bear—a burden that goes beyond mere financial policy and goes beyond ethical responsibility. The severity of this debt is compounded by the interest payments it requires, which have grown to more than $1 trillion a year, more than the country spends on national defense.
This situation illustrates a troubling scenario where a government, in order to manage its debt, resorts to issuing more debt, a practice that is untenable by any standard standard of sound budgeting. The economic consequences of this debt cycle are profound and lead to higher interest rates, likely higher inflation and misallocation of resources that suppress productive private sector activity.”
Not only will it be difficult to avoid raising taxes on the middle class, but Ginn warns that over the next ten years, millions of Americans will likely be forced to give up their benefits as programs go bankrupt.
Citing Rahm Emanuel, President Barack Obama's former chief of staff, Ginn calls for not letting the crisis "go to waste."
“As we face these fiscal turmoil, discretionary spending caps and the debt ceiling set to expire in 2025 add complexity to an already challenging fiscal environment. The US risks facing a serious budget crisis without thoughtful reform, especially in the so-called "entitlement programs" such as Social Security and Medicare, which eat up a large portion of the federal budget. These areas need to be addressed as both will essentially go bankrupt over the next decade and millions of recipients will face significant benefit cuts.
Given all these challenges, fiscal and monetary rules are of paramount importance.”
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