Liberal columnist Matt Miller is ready for a national discussion about the way to deal with our deficit. What’s more he thinks that Rep. Paul Ryan’s “Path to Prosperity” budget is a great way to kick off the “uber-debate the country needs to have.”
That’s where his graciousness ends. Miller then says that he’s ready to start the discussion only “once we get done dissecting the deceptions, hypocrisies, and regressive priorities in the Wisconsin Republican’s latest blueprint.” He then goes on to call Ryan’s plan a “misguided, misleading, and unacceptable vision.”
So much for an honest debate. Rather than engage in numbers and math, Miller, like so many liberals, relies on partisan attacks and acerbic adjectives.
But we’re better than that. Rather than rig the debate by attacking their ideological worldview, let’s lay some honest ground rules, chief among them the true size of the problem. And boy is it huge.
A new fiscal study from researchers Richard W. Evans, Kerk Phillips, and Laurence Kotlikoff uncovers the true size of our national debt. “In the U.S., federal liabilities (official debt plus the present value of projected non-interest expenditures) exceed federal assets (the present value of projected taxes) by $211 trillion or 14 times GDP.”
Let that number sink in for a minute: $211 trillion. The gross domestic product of the entire world – the value of every good and service produced by every human being – was about $63 trillion last year. Our projected deficit is more than three times that!
The enormity of that figure is mostly caused by unsustainable promises made by the three largest entitlement programs – Medicaid, Medicare, and Social Security. The growing cost of those programs is quickly pushing the United States toward what the researchers call “game over” which they define as “the point where the policies can no longer be maintained.”
“Game over” is reached when Washington is forced to redistribute more money than younger generations earn. The problem is, once you set down this path, it turns into a self-reinforcing death spiral that is very difficult to escape. “As the government enforces every greater redistribution, the economy saves and invests less and wages either fall or grow at slower rates,” the researchers write. As the economy slows, so too does the amount that young adults can prop up older generations. The more redistribution is enforces the more rapidly society speeds towards “game over.”
And once we reach that point the federal government will be forced, in the words of the researchers to “let the government take all of the earnings of the young and give them to the old and, thereby, terminate the economy.”
In other words, if you think society is redistributive now, you ain’t seen nothin’ yet.
If the “game over” point seems apocalyptic, that’s because it is. What’s more, it may not be far off. Their model estimates that there is a “35 percent chance of reaching the fiscal limit in about 30 years.”
None of this is to say that this course towards tragedy is unalterable. Indeed, Rep. Paul Ryan introduced a plan last week that makes each of the entitlement programs sustainable over the long-term by introducing market-based reforms. By comparison President Obama’s “plan” (which does nothing to fix the growth of entitlements) would never (as in ever) balance. And Congressional Democrats, well they have no plan at all (and haven’t even passed a budget for more 1,050 days).
Now that we have a good starting point – a debt measured in the hundreds of trillions of dollars – let’s start the conversation about reforms. Ready when you are…