and it's not Social Security, Defense or Medicare
President Bush ignores the real problem and potential solution to this country's fiscal morass which is the interest on the national debt. The rationale used to mitigate the increasing debt is that it is the same % of GDP. The real issue is not the percent of GDP the national debt represents but how much interest does that debt require us to pay.
Since 1980, American taxpayers have paid $6.5 trillion in interest on our national debt. That amount of money would have solved both Social Security and Medicare funding problems as far as the eye could see. The ongoing interest comes off the top of our tax dollars and is in the $330 billion range in the 2004-05 budget. That money would pay for prescription drugs, increased national and homeland defense expenditures, education, and still leave room for another tax cut.
The real issue is that the worst is yet to come. Interest rates are at a 45 year low and when they return to their historic norms, the interest payments will skyrocket to as much as $500 billion per year. The interest payments never end until we repay the debt. If you look at the Bush Budget on the OMB web site, you will see he is telling the American taxpayers that by the time he leaves office we will have a national debt of $10 trillion. When he took office that number was $5.7 trillion. When Ronald Reagan took office that number was $909 billion or an increase of 11 times from 1980 to 2008.
The issue with the federal budget is not cutting social programs, increased defense expenditures or the impact of the baby boomers (Social Security and Medicare). It is the growing interest on the national debt. The policy we are following does not stop adding to the national debt and will not reduce the interest we will be required to pay year after year. Until we face up to the fact that we must pay for what we are spending there is no solution and in time the debt and the interest obligation it carries with it is going to swamp the American economy.