Four years before the 2008 financial crisis, the subsequent bank bailouts, and the Obama presidency that have more than doubled the national debt, MIT published a book by Laurence Kotlikoff and Scott Burns entitled The Coming Generational Storm, which has proven to be prophetic in sounding the siren about America’s coming fiscal solvency crisis.
Taking a look at America’s growing entitlement spending, these two authors came to the inescapable conclusion that America was on a collision course with math when it comes to its debt obligations.
Their contention was, at a time when the national debt was only $8 trillion, that this country then had a $44 trillion unfunded mandate as it pertains to entitlement programs within the next 30 years. You can only now imagine, with the further raiding of entitlement trust funds to pay for new spending, coupled with an increasing population, that these unfunded liabilities have only grown worse.
The conclusion remains the same now as it did in 2004: America is sitting on a debt time bomb that has the potential to bring-down our way of life.
With the enormity of this problem remaining, it’s truly baffling that the GOP presidential contenders are fighting it out over smaller, yet trendier, issues. The prospect of America becoming a gigantic version of Greece ought to give us all pause, yet those contending to be president are content to ignore this existential issue because it has fallen from the headlines.
True leaders must ensure that our nation’s long-term debt obligations are addressed and made a major issue of the 2016 elections. We must have fundamental entitlement reform, coupled with smart tax and regulatory reforms that can unleash growth in our economy, if we hope to stave-off economic calamity.
Shrinking government, while growing our private economy, is the only recipe for righting our ailing economy.
If these reforms are not made, our country will enter the debt “death spiral” as early as 2021, with additional $1 trillion deficits for as far as the eye can see. If we desire to hand-down a promising and prosperous America to our children and grandchildren, these reforms must happen now; we have no time left to waste.