E-Newsletter No. 2
If not us, who?
If not now, when?
As many of you are aware, President Obama delivered his State of the Union speech on Tuesday night, January 28th. Our Editorial Board was extremely pleased when, six minutes into his speech, the president acknowledged that what unites the people of this nation, regardless of race, or region, or party, young or old, rich or poor, is the simple, profound belief in opportunity for all; the notion that if you work hard, and take responsibility, you can get ahead in America. As we all know, this is the basic premise of our Foundation to Promote Personal Responsibility.
However, we were extremely disappointed that the president did not put forward any plan to fix the country’s growing debt problem. Instead, the “sound bite” that he included in his speech was – Our deficits – cut by more than half. However, as we know, that statement simply means that the US government’s debt is not being repaid, but instead continues to grow (more on that later).
Our Editorial Board recognizes that it will take a long time (many years) for our country to repay its debt, and we acknowledge that cutting the deficit is preferable to having the amount of the annual deficit grow each year. However, the US government is not accomplishing what it needs to do – – cut spending and generate the necessary surpluses to begin repaying the debt. Much of the remainder of the president’s speech was devoted to discussing additional programs that the federal government should initiate (without any mention of how those programs would be funded).
In our monthly newsletter, we intend to keep you informed about the amount of the incurred “on-book” debt per US citizen (i.e., the amount of “on-book” debt, which does not even include the present value of the future payments that have been promised for Social Security and Medicare). According to the US Debt clock, this amount of debt per citizen increased from $54,426 as of January 1st to $54,544 as of February 1st.
As many of you are aware, once the federal government was “re-opened” last October, the next key date became February 7th, when the country’s debt ceiling needed to be addressed. We are extremely disappointed to report that during the week of February 10th, the US House of Representatives and the US Senate passed legislation to suspend any limitations on the US debt until March 2015. This legislation was signed into law by President Obama on Saturday, February 15th. In effect, our elected officials have written themselves a blank check on your (and, if applicable, your children’s) bank account for the next thirteen months.
We would also like to mention that on February 4th the nonpartisan Congressional Budget Office released its annual budget and economic outlook. We are providing the following link to an in-depth analysis prepared by the Committee for a Responsible Federal Budget –
The main messages are –
– Although the country’s deficit levels will decrease this year and next, the annual deficit will begin growing again within two years.
– Almost nothing has been done to finance or slow the growth of “entitlement programs”, which are the main drivers of our long-term debt.
– Unless changes are made, both spending and taxes will remain above historical average for the next decade, and will continue to grow over time, and annual deficits in excess of one trillion dollars will return early next decade.
– Interest payments on the country’s debt will quadruple in nominal terms between 2013 and 2024.
– By 2020, interest payments on the cumulative US debt will exceed the level of all non-defense discretionary spending.
The Congressional Budget Office’s projections are further evidence that the country’s annual deficit and cumulative debt problems are far from resolved. The Campaign to Fix the Debt, the Congressional Budget Office, the Committee for a Responsible Federal Budget, and our Foundation all join together, to encourage our elected leaders to work toward reducing the amount of federal expenditures, and ultimately reduce the amount of our country’s debt. Please refer to our Conversation Piece entitled What the US Government Should (and Should Not) Do, and our recommendations for spending reductions, to restructure the size of the US government.
In closing, we want to highlight (and applaud) the final comments President Obama made in his State of the Union speech – Our freedom, our democracy, has never been easy…. But for more than two hundred years, we have… expand(ed) the possibility of individual achievement….so that the words set to paper by our Founders are made real for every citizen. The America we want for our kids – a rising America where honest work is plentiful and communities are strong, where prosperity is widely shared and opportunity for all lets us go as far as our dreams and toil will take us – none of it is easy. But…I know it’s within our reach. Believe it.
We share the president’s sentiments. Keep the faith. We can get this fixed…..