Black holes destroy any objects that happen to fall victim to their gravitational pull. The edge of a black hole, the event horizon, is a boundary that marks the point of no return. Once an object crosses the event horizon, it cannot escape and will be ripped to pieces, atom by atom.
While the astrophysical properties differ, America is facing its own crisis for which the gravitational pull is growing stronger every day: a national-debt crisis. Once our country is fully engulfed in a debt crisis, our economy will be torn apart and every American will be a victim of the federal government’s failure to prevent this disaster.
In the wake of the recent financial turmoil, the federal government increased spending in a Keynesian experiment to stimulate the economy. Democrats promised that enacting a massive spending package would boost the economy and keep the unemployment rate from exceeding 8 percent. But high levels of unemployment persist, growth has been anemic, and analysts are predicting an even weaker economy for the second half of 2010. Now that the national debt exceeds $13 trillion, the American people have concluded that this has been an awfully expensive experiment.
As the pull toward a national-debt crisis intensifies, Democrats are beginning to feel the pressure. Their shortsighted solution is to increase taxes by $3.8 trillion on Jan. 1, 2011. Washington does not have a revenue problem; it has a spending problem. In 2009, the federal government collected $2.1 trillion in revenue, but spent $3.52 trillion — an 18 percent increase in spending from 2008. Republicans have offered numerous spending cuts, but the Democratic majority is out of control. Contained in their spending package, which was purportedly designed to stimulate economic growth, were such necessities as $71,623 to study the effects of cocaine addiction on monkeys and $390,000 to study the effects of malt liquor and marijuana on adults. While some have likened Speaker Nancy Pelosi’s Congress to a swamp, it seems more akin to Animal House.
One indicator of the point of no return is the ratio of debt to the gross domestic product (GDP). Economists generally consider levels of debt at 60 percent of GDP or more to be unsustainable. When gross public debt exceeds 90 percent of GDP, economic growth tends to decline considerably. Additionally, debt at this level is associated with stagflation — declining growth and rising inflation.
How close are we to this event horizon? The publicly held debt as a share of GDP will exceed 60 percent this year. According to the nonpartisan Congressional Budget Office (CBO), debt will reach 90 percent of GDP by 2020. The interest on this debt alone will be $916 billion annually, meaning that one in five tax dollars will be dedicated to making interest payments. By 2022, interest payments on the national debt will exceed yearly defense spending, and by 2037, yearly interest expenses will be double those of spending on defense — this is the same year the Social Security trust funds are expected to be exhausted. Historians have observed that declines of great empires are often associated with fiscal crises, most notably when a country’s spending consistently exceeds its revenues. Such was the case for the Soviet Union, the British Empire, the French Bourbon monarchy, and the Chinese Ming dynasty.
We must fight the tendencies that are pulling our country toward a debt crisis. Too often, politicians put off serious decisions, but we may pass the event horizon of this crisis by the end of this decade. House Republicans have demonstrated that we are serious about making the needed changes to Congress in order to be more accountable to the American people, but it is incumbent upon the Democrats to work with us to protect the future of our country. Fortunately, we have the power to change our course — we just need the will.
– Rep. Kevin McCarthy represents California’s 22nd district and is the Republican chief deputy whip and chairman of the America Speaking Out Project.