Outstanding Republican U.S. Sen. Bob Corker of Chattanooga does not think reducing our nation’s $13.3 trillion debt will be easy. In fact, in a visit to the Times Free Press on Thursday, he was candid about how difficult it will be for our lawmakers and the president to agree on ways to lower the debt, which threatens the United States’ prosperity.
But he pointed out alarming figures that simply cannot be ignored:
In 2010, our publicly held debt is about 62 percent of our gross domestic product, which is the total value of the goods and services our nation produces in a year. But by 2030, the debt will rise to 146 percent of our GDP! Corker pointed out that the nation of Greece had to be bailed out by the European Union when its debt reached 120 percent of its GDP.
This year, federal spending exceeds federal revenue by about $1.47 trillion, and at no point in the next decade is revenue expected to close the gap with our high spending.
Corker noted that the average Tennessee household earned $43,000 in 2008. If the average household in the state followed Washington’s example, it would spend $74,000, or $31,000 more than it earned.
Back in 1970, mandatory spending such as Social Security and Medicare consumed 31 percent of the federal budget, while most of the budget went to discretionary spending such as defense and highways. But today, spending on entitlements such as Social Security eats up 56 percent of the budget.
By 2035, interest payments on the national debt will come to almost $2.3 trillion — or a quarter of the budget. Even today, the interest payment on the debt far exceeds what we spend on the federal departments of Transportation and Homeland Security combined.
In 1960, only 5 percent of our publicly held debt was owned by foreign holders. Today, foreign holders own 46 percent of our debt, including 10 percent that is owned by Communist China.
All of this bad financial news comes in the midst of an economic crisis and high unemployment when, as Corker says, “The most important thing is for heads of households to have good-paying jobs.”
Part of the problem, as he sees it, is that lawmakers and the public tend to zero in on narrow particulars related to tax policy and spending on specific programs, rather than focus on the bigger picture of how to get runaway debt under control.
Having been in Washington several years now, he has seen how debates on specific tax and spending policies rapidly bog down into political contests that do not put the country’s interest first.
So what does he propose? Well, he says lawmakers of good will on both sides of the political aisle should shift their focus at least temporarily away from the particular spending cuts or tax changes they want. Instead, they should first decide to set spending at some particular percentage of our gross domestic product — say, in the range of 18 percent to 20 percent.
With agreement on that number up front, he says, the specific debates on taxes and spending can proceed more productively, because there will be a clearer target of exactly where our nation is trying to go financially.
Otherwise, the senator said, lawmakers and the president will just continue to squabble over this or that particular chunk of spending and this or that specific tax, with no clear, overarching vision.
Corker is relying on his reputation for reaching across the political aisle to generate support for his plan to cap spending at a certain percentage of GDP. We do not envy him that task in highly partisan Washington. But he is correct that our nation cannot continue on its current economic path without grave consequences.