Somewhere along the line our country has fallen into a pattern in which running large budget deficits has become our normal operating procedure. This means that most years in recent memory we’ve spent much more in government programs than we are willing to raise in tax revenues. We’ve then borrowed money, much from other countries such as China, to cover the balance.
The result is a mammoth and growing federal debt that is now approaching the $12 trillion mark, an all-time record. The yearly interest payment alone on this debt is approaching $300 billion (more than we pay each year for the Iraq and Afghanistan wars combined) and is rising at a rate of about 20 percent every year. To make matters worse, we’ve established the deficit-and-debt habit at the very moment that the baby boom generation is starting to retire, which will lead to a whole new set of fiscal pressures as Medicare and Social Security spending balloons.
Facing up to these challenges means coming to terms with many tricky and tough questions about things like health care costs, Social Security and government accountability. Among these questions is figuring out a more responsible approach than we now have to how we manage our yearly budgeting as a nation, in particular how we deal with deficits. How can we make sure deficits stop driving the national debt toward unsustainable levels so that we can invest revenues in more productive things than paying the interest on foreign loans?
This deliberation guide suggests three approaches that you can consider for how the nation might deal more effectively with its yearly budgeting process and the question of deficit spending. Which makes the most sense to you, and why?