"...neither the legislature, nor the nation itself can validly contract more debt, than they may pay within their own age, or within the term of 19 years."
- Thomas Jefferson
For roughly 150 years, the United States maintained a goal of paying off its debts within a generation - and the nation prospered. However, the standards began to shift after that first century and a half. Politicians have made various arguments along the way to justify their actions, but in the end, every taxpayer is now left with roughly $130,000 as his/her share of the national debt1. This number is increasing by roughly $7,000 per year even after a decade of growth, with no end in sight. Virtually all experts agree that our current path is unsustainable and that the rate of increase in the debt will accelerate in the near future due to (1) the natural market cycles calling for a recession in the near term, and (2) the aging population increasing the costs of Medicare and Social Security expenses. Unfortunately, our politicians continue to ignore the problem.2
It is true that running a deficit will help the economy in the short term, but only at an increased expense in the future. The same rules that apply to a family budget apply to the national budget. Interest must be paid on previously acquired debt, which results in a lower standard of living as long as that debt exists. When one generation fails to pay off its debts, the following generation is left to continually pay the interest on that debt. In short, this works as a generational transfer of wealth; parents are effectively stealing money from their children. I agree with Thomas Jefferson: it is unethical to burden our children with our debt.
However, I am also concerned that we are now entering new territory with the debt. Many countries have discovered that debt above a certain level results in economic collapse. Further, history shows that an economic collapse increases the risk of government instability and can result in the loss of individual rights. While history does not dictate this outcome, it seems to be self-evident that we should avoid taking this type of risk. While history does not provide us with an exact level of debt that will cause economic collapse, debts above 120% of GDP tend to become highly susceptible to eventual collapse (although the bubble can last a long time before the collapse is realized). Our current debt-to-GDP ratio is 105%, a level that has not changed much since the Great Recession. It is almost certain that this number will increase during the next recession, which is likely quite soon.
It is bad enough to acquire debt without any plan to repay it, but to acquire the level of debt that we are now seeing is fundamentally immoral. We must demand greater integrity from our politicians and from ourselves. The time has come to restore our honor and to pay our debts. While I am no longer running for Congress, I still believe that we have to establish a plan along the lines of what I proposed previously as shown here.
1 There are roughly 162 million taxpayers in the US while the national debt is roughly $21.4 trillion (Sept 2018). In the 7 years since I originally wrote this (2011-2018), the national debt increased by nearly 50% from $14.7 trillion to $21.4 trillion, an average of nearly $1 trillion per year. NOTE: The reported annual "deficit" does not represent the full change in the "debt" from year-to-year because our politicians have moved some expenses off-budget thereby hiding the expenses from the reported "deficit", which "only" averaged $750 billion during this same period. The change in "debt" is a more accurate representation of our financial position.
2 Even the politicians who used to complain about President Obama's spending have gone eerily silent on the subject.