1/21/2020

An Anxious Fiscal Future

"Thirty years from now, if the United States remains on its current fiscal course, our Federal government will hold about 100 trillion dollars in federal debt. More than a quarter of our annual GDP will be needed just to meet baseline spending commitments. A full twenty percent of that will go to interest payments. Meanwhile, a smaller and smaller share of our population will be in the workforce, even as Social Security and Medicare balloon. At some point, perhaps, we’ll find it more efficient just to pair each worker with one retiree, sending the latter’s medical bills directly to his or her state-assigned sponsor.

These are not (apart from the last glib prediction) the wild projections of Freedom Caucus cranks. I encountered them in Philip Klein’s latest book, Fear Your Future: How the Deck is Stacked Against Millennials, And Why Socialism Would Make It Worse. Klein, a respected commentator on fiscal policy, got most of his data from the Congressional Budget Office’s 2019 projections. Naturally, financial predictions are always subject to some uncertainty, but these are as solid as something you might get from your accountant or retirement planner. Of course, it’s possible that we’ll find a way to alter our economic trajectory between now and 2050. We’d better hope, though, that the course-change isn’t precipitated by a major fiscal crisis, which would force us to make steep sacrifices just to maintain some bare foundation of a functional economy."