Last week, the debt-denier brigade had a lot of fun. Partying over new CBO numbers that point to a reduced federal deficit this year, the debt-doubters were ecstatic. The deficit will "plummet," claimed the Washington Post. Medicare spending reductions are ''incredible,'' said Derek Thompson at The Atlantic. The Daily Kos went further — a grand bargain on the debt is now unnecessary, the liberal site proclaimed.
Hold the champagne.
Yes, last week's deficit news was welcome. The 10-year deficit picture did indeed brighten. But let's get real. We're still running $642 billion in the red. $642 billion. It says a lot about our current political dysfunction that a $642 billion overdraft is a cause for celebration.
The facts don't support this joy. Rather, they still speak to a hard reality — one of looming crisis.
Just last year, the CBO examined how current policies would impact the long-term deficit. It wasn't a pretty picture. According to the report, in just over 20 years, America's debt-to-GDP ratio was expected to hit 200 percent. That's not a problem, it's a disaster. True, as Ezra Klein points out, for the next 10 years, the deficit doesn't look as bad. But America's debt battle was never going to be won or lost this decade. It's the following decades that are key. And based on what we're doing at the moment (or not doing — I'm looking at you, entitlement reform), the deficit trend will soon go vertical.
Denying America's debt crisis borders on delusional.
Addressing the deficit can't wait. Even assuming interest rates remain stable over the next 10 years (an assumption burdened by heavy risk), if we don't get serious today, we'll reduce our ability to deal with the economic challenges of tomorrow. Based on the cyclical recurrence of U.S. recessions, blindly accepting this risk seems illogical.
The solution ought to be clear: sensible austerity and serious entitlement reform.
In relative terms, today's entitlement spending seems manageable. But after 2023, Medicare costs will explode. This is a reality that can't be wished away. If we entertain the false prophets of inaction, our long-term fiscal nightmare will be compounded by the new premiums we impose on our debt.
Ultimately, solving America's debt crisis isn't about politics. It's about mathematical reality. Debt denial is the fiscal brother to birtherism. It's a viewpoint sustained by ideological intransigence and defined by a perpetual war with the facts. It's the equivalent of a ship captain who sails towards an underwater iceberg because he only gazes above the surface.
With hard choices and shared sacrifice, conservatives and liberals can work together to release America from a future of suffocating debt.