By Jim Towey
Imagine if a week ago the residents along Fort Myers Beach, Florida had ignored the warnings about the approaching monster storm and decided that the surge forecasts were exaggerated. Had they taken that approach, every one of them would have been swallowed up into the fury of the Gulf of Mexico, and the death toll would have been measured by the thousands instead of dozens.
I am not exaggerating when I say that America has a category five deadly economic storm bearing down upon our land. High inflation, rising interest rates, a recession, unprecedented federal budget deficits, and a mind-numbing amount of national debt have created a perfect storm that will make landfall soon. Rising prices, cooling employment numbers, and mortgage rates at levels not seen in 20 years, are the outer bands we feel now.
Welcome to the “doom loop”
Yesterday’s New York Times had a headline, “U.S. National Debt Tops $31 trillion as Rising Rates Add to Fiscal Burden.” While few paid much notice to such ho-hum news, economists did. They consider current conditions ideal for a “doom loop” as the Wall Street Journal reported. The doom loop writ small is familiar to anyone who has had too much credit card debt and watched spiraling interest charges push them into bankruptcy. Writ large, it means the country is almost certainly headed toward a vicious circle where government borrowing to pay rising interest rates on the bloated national debt will generate even more borrowing and more interest expense, causing harrowing economic and social consequences. Esteemed economists now warn that the storm bearing down on the US economy will be a Category 5 direct hit.
And who will suffer most? The elderly living on the margins of poverty, the sick in need of health care they can’t afford, and all those dependent on government services for survival. Social Security is the federal budget’s largest program, and because benefit increases are tied to the consumer price index, Social Security is expected to increase about 8% to $1.3 trillion in this new 2023 fiscal year. Medicare, Medicaid, and other health programs combine for an additional $1.6 trillion. When the consequences of surging interest payments on the national debt – gross interest payments this year will likely exceed a staggering $1 trillion for the first time – the dire consequences of the $7 trillion of new debt issued by the U.S. Treasury for Covid and lockdown remediation become crystal clear.
We should read these numbers and weep. It took our nation 205 years to reach $1 trillion in debt. Forty-one years later, we’re at $30.8 trillion and counting.
If you are like me, it is hard to wrap your mind around a trillion of anything. A trillion dollars is a thousand billion. A billion is a thousand million. Economists might as well use light years to explain galactic numbers measured in trillions. This dilemma explains why, for the most part, our government’s leaders are paying nearly no attention to this fast-approaching economic storm and its impending catastrophic implications that will play out within the next few years.
Sacrifice? Forget it!
And one of the reasons we hear crickets in Washington is because the federal budget can only be tamed through cuts and sacrifice, and who wants that? Who wants to tell the morbidly obese patient who loves to eat to not only stop eating so much, but actually to start losing weight? A person weighing 400 pounds should change diets in a hurry or expect to die prematurely and miserably. Likewise, a country swollen with unmanageable debt faces the same urgency to cut back. But instead of belt tightening, our government keeps borrowing and spending. Meanwhile, instead of discussing fiscal strategies, the public square seems preoccupied with such silliness as whether a boy is a girl or a man a mother.
America must wake up to the unprecedented challenges before us. Self-sacrifice, national unity, generosity toward those in need, and a willingness to forego comfort now for a better future for our children and grandchildren will be vital if we are to survive as a nation.
It is nature’s way that hurricanes weaken when they hit land. The perfect storm zeroing in on our country, decades in the making, is governed by different rules. We have been warned.