Blame both Democrats and Republicans if we go broke

The president has his debt ceiling increase and there is talk that he may endorse a permanent repeal of the debt ceiling. That sets the stage for a grand bargain in which the president and Republicans can get their tax cuts and the Democrats can secure a boost in domestic spending. Leaders of the left and right have been all too ready to ignore the fiscal future when it suits their purposes, but the American people can no longer afford such beggar-thy-future schemes.

A sober few in Washington speak of the problem. In 2011, Federal Reserve Chairman Ben Bernanke stated, “The unsustainable trajectories of deficits and debt [projected to come from continuing current policies] cannot actually happen, because creditors would never be willing to lend to a government whose debt, relative to national income, is rising without limit.” An ever-increasing ratio of federal debt to national income will eventually render the government unable to borrow because national income reflects a government’s ability to repay its debt. In July, current Federal Reserve Chairman Janet Yellen echoed Bernanke when she said, “Let me state in the strongest possible terms” that the current fiscal path will lead to an “unsustainable debt situation.”

{mosads}Rather than deal with this problem, opinion leaders dismiss the mounting debt when it suits their own purposes and then opportunistically cite it to fend off the other side’s agenda. On the left, there’s Nobel Laureate economist and New York Times columnist Paul Krugman. During the Obama administration, where debt as a percentage of gross domestic product ballooned from 39 percent to 77 percent, Krugman relied on the trouble being at least 25 years away, as if no harm comes from waiting.

A need for deficits in the short run is no excuse for incumbents to postpone the hard choices needed to control the debt in the long run. He also derided those concerned about deficits as “scolds.” As late as October 2016, he claimed that “debt scolds” were motivated by a desire to stop Hillary Clinton’s fiscal agenda. But only weeks after, with president-elect Donald Trump talking of tax cuts, Krugman became a born-again deficit scold himself, saying that tax cuts would balloon the deficit and that “deficits matter again.”

President Trump’s director of the Office of Management and Budget, Mick Mulvaney, has made his own u-turn, ending up where Krugman had been during the Obama administration. As a congressman in 2015, Mulvaney was deeply concerned about the debt, arguing that there is “no honest way to justify not paying for spending.” Now, however, like most Republicans and Democrats in Congress, he focuses on the next 10 years rather than the burgeoning debt that current policies guarantee.

To be sure, the Trump administration claims to balance the budget in 2027 with a combination of cuts in discretionary spending and economic growth. But this rosy scenario is as unrealistic as the others that preceded it over the decades. The real problem lies with ballooning entitlement spending in future decades resulting from current policies that the president is so far unwilling to touch. The president has repeatedly said he will not cut social welfare programs like Social Security and Medicare. But cutting discretionary spending to the bone will not be enough to head off a dangerous fiscal reckoning.

Our nation’s mushrooming debt is not some debating gambit to be trotted out only when political opponents seek to shower their base with fiscal favors. Rather, America’s politicians need to stop being opportunistic debt scolds. To give themselves the courage necessary to be serious, prudent stewards of the public fisc, they should have the government send in every household every year a letter stating how much keeping the government solvent in the long run will cost the average family annually in tax increases or spending cuts, how that figure has changed under the current Congress and how much it will grow if Congress delays decision.

If Congress keeps on kicking the can down the road, some Congress decades hence will have to impose draconian tax increases and entitlement cuts on our children. An artful deal between Trump and the Democrats would hasten that fiscal armageddon.

Sai Prakash is a law professor at the University of Virginia and a senior fellow at the Miller Center, an organization focused on public policy and political history.

David Schoenbrod is a law professor at New York Law School and the author of several books, including “DC Confidential: Inside the Five Tricks of Washington.”