Subcommittee on Federal Spending Oversig

The Effect of Borrowing on Federal Spending Subcommittee on Federal Spending Oversig

Once again, the Federal Government reached its credit limit. As a Nation, the United States owes almost $20 trillion, about $60,000 for each American alive now, including children. This year alone, we will pay $295 billion in interest. This is more than we spend on seven Cabinet Departments, the White House, Congress, and the courts combined. Ongoing deficits mean interest will consume more and more of the budget. The American worker sees roughly seven cents of their tax dollar going to interest and 30 cents to discretionary spending. But by the time a recent graduate today is near retirement, interest and discretionary spending will be taking an equal share of the tax dollar, roughly 19 cents. We are told that $20 trillion is not that much, and that it may well grow. How should the U. S. respond to its budget situation? Some argue that raising the debt should just be automatic; we really should not debate about it; that any debate or amendments would suggest the possibility of default, and that that would be dangerous. It is wrong for Congress to approve more borrowing without necessary reforms and without making it a point to try to find a chance to fix some of the situation we have. The Budget Act of 1974 was supposed to be an improvement and fix problems, but over the last 40 years big spenders have largely figured out how to evade it.