Congress recently averted a federal debt-repayment crisis that could have wrecked our economy, and that's good.
Our lawmakers and president took the easy way out, making no tough decisions to slow the soaring deficit when they agreed to increase federal spending and raise the government's borrowing limits as part of a two-year budget deal.
As economists note, a nation's financial stability depends largely on its public debt as a share of the total economy, or GDP. When the debt-to-GDP ratio gets too high, the government is headed for trouble.
America's publicly held debt is now higher as a share of our economy than at almost any time since World War II. And the International Monetary Fund says the United States is the only advanced economy projected to increase its debt-to-GDP over the next five years.
The final months of Bill Clinton's presidency and the first few months of George W. Bush's were the last time policymakers allowed a healthy economy to produce a budget surplus and start paying down the debt.
This new public debt/GDP limit would replace the current debt ceiling limit - which serves no purpose other than regularly threatening the creditworthiness of the U.S. Treasury, and should be repealed.
Absent a mechanism like the Fiscal Responsibility Act, the most likely course of action is for our federal debt to continue growing exponentially.
https://www.realclearpolitics.com/articles/2019/08/03/congress_debt_deal_took_no_courage_solved_few_problems_140923.html
Our lawmakers and president took the easy way out, making no tough decisions to slow the soaring deficit when they agreed to increase federal spending and raise the government's borrowing limits as part of a two-year budget deal.
As economists note, a nation's financial stability depends largely on its public debt as a share of the total economy, or GDP. When the debt-to-GDP ratio gets too high, the government is headed for trouble.
America's publicly held debt is now higher as a share of our economy than at almost any time since World War II. And the International Monetary Fund says the United States is the only advanced economy projected to increase its debt-to-GDP over the next five years.
The final months of Bill Clinton's presidency and the first few months of George W. Bush's were the last time policymakers allowed a healthy economy to produce a budget surplus and start paying down the debt.
This new public debt/GDP limit would replace the current debt ceiling limit - which serves no purpose other than regularly threatening the creditworthiness of the U.S. Treasury, and should be repealed.
Absent a mechanism like the Fiscal Responsibility Act, the most likely course of action is for our federal debt to continue growing exponentially.
https://www.realclearpolitics.com/articles/2019/08/03/congress_debt_deal_took_no_courage_solved_few_problems_140923.html
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