The Wall Street Journal: A U.S. National Debt Crisis Is Coming
Article by William A. Galston in The Wall Street Journal
Despite intensifying polarization, the Republican and Democratic parties are alike in one important respect: Both now behave as though budget deficits don’t matter.
Red and blue politicians alike seem to think we can increase spending, cut taxes indefinitely, and borrow whatever we need to close the gap while running up the national debt—all without paying a price.
Why not make everyone happy by eliminating taxes altogether and borrowing everything?
The answer is obvious: No prospective lenders would believe that they’d be repaid in full.They would thus demand ever-higher rates of interest on debt. Eventually, the merry-go-round would grind to a halt, triggering a crisis the likes of which the U.S. has never faced.
Our current course—beset with rising net interest outlays and stagnant revenue—could also halt the merry-go-round, though in slow motion.
At some point, the volume of debt needed to finance our deficits would ......