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Why the federal debt must be a top priority for the 2016 presidential candidates

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SUMMARY:

Authors

One issue above all others that remains a problem and should transcend partisan agendas is the unsustainable projected growth of the federal debt, write Bob Bixby of the Concord Coalition and Maya MacGuineas of the Committee for a Responsible Federal Budget. They warn that candidates “may be tempted to conclude that our fiscal problems are behind us. That would be a mistake,” given that, over the coming decade, the debt is on track to grow by more than $7 trillion and resume a long-term unsustainable path – which is “a matter of arithmetic, not ideology.” Bixby and MacGuineas argue that reducing the long-term debt is in fact an economic growth plan because government debt crowds out productive investments in people, machinery, technology, and new ventures, resulting in fewer job opportunities, lower wages, and slower GDP growth. Economic growth is crucial but alone can’t solve the debt problem, and candidates must be willing to explain the issues to voters: the real cause of projected deficit growth and rising debt is a built-in mismatch between projected revenues and popular benefit programs that operate on autopilot, especially Medicare, Medicaid, Social Security, and interest payment on the debt. They present a list of things candidates should pledge in their first budgets, with a focus on Social Security, health care, and taxes.

“In the past, we have seen some elections in which the candidates competed to be fiscally responsible, and other elections in which they pandered and ran from the issue. This is a critical moment for the United States and the debt; the next president, whoever he or she is, will have to face a number of looming fiscal issues from the depletion of the Social Security disability fund, to a likely increase in interest rates, to the ongoing extremely expensive retirement of the baby boom generation. Growing the economy is one of the themes of this campaign and yet it cannot happen without a sustainable fiscal plan. Citizens are willing to be part of sensible reforms that would help control the debt and grow the economy, but they will need presidential candidates—and ultimately a president—who is willing to honestly talk about and tackle the issue,” they conclude.

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