Over the next decade, says CRFB, the U.S. government debt was on track to reach a staggering 81.5 percent of GDP, up from 72.8 percent today. Thanks to this noble display of statesmanship, it may hit only 78.9 percent.
It’s enough to make you wish they hadn’t bothered making a deal. In that case, automatic spending cuts would have kicked in, trimming projected outlays by $1.2 trillion over nine years. The sequester would have been ugly, taking the form of indiscriminate across-the-board reductions for domestic programs and defense. But it would have actually made a dent in the ever-expanding federal budget.
What we got instead was not a grand bargain. It was an exercise in evasion. That is no accident. The reason we got into the current fiscal pit is that politicians follow the path of least resistance. They prefer not to antagonize constituents by trimming back benefits that are widely cherished. But they also know better than to compel taxpayers to cover the entire cost of those programs. So spending mushrooms, tax revenues lag behind, and the debt soars.