Columbus Perspectives on the National Debt
by Nicholas Diaz
In March of this year, the national debt surpassed an astounding $28,000,000,000,000, according to the Peter G. Peterson Foundation. This debt has serious implications on the future of the United States economy and has sparked debate in Congress and across the country about how to best address it. But to understand the concern regarding the national debt, one must first understand what the national debt is.
According to economics teacher Mr. Daniel Ciocca from Christopher Columbus High School, the national debt is the total amount of money borrowed by the U.S. government to finance its deficits. He says, “every year the U.S. government spends money on stuff.” This can include benefits, insurance, roads, bridges, and labor. “If it spends more money than it collects in taxes, it has to get the money from somewhere,” he states, “so it borrows.” It does this by having the Treasury sell securities that will mature and need to be paid back with interest. The national debt, then, is an accumulation of government liabilities. It is the total amount of money that the U.S. government has historically borrowed through bond sales to finance its budget deficits.
In recent years, however, the national debt has seen tremendous growth due to a combination of increased spending and decreased revenue collection that are not serving the public purpose. Under the current administration, large spending bills are being proposed that will significantly increase the national debt. Republicans, however, have also added to the debt, which was seen with the Trump Administration’s tax cuts. Democrats and Republicans, then, are both responsible for the debt issue facing America.
For quite a while both political parties in the U.S. Congress have had difficulty managing the budget, so American citizens are now left with the burden of paying off a substantial amount of public debt. That is why this issue is of such major importance. The public debt must be paid off eventually, but Congress has continued adding to the number on that future check. If the debt gets too large, Mr. Ciocca warns, the government will face difficulty paying for other things, as it will first have to fulfill its obligation of paying interest. What makes America so great is its ability to leave a better future for the next generation, but increasing the national debt only puts a burden on future Americans. Not only will they have to pay off the debt through increased taxes in the future, but “every dollar that goes toward interest payments means less resources available to build a stronger, more resilient future.” (Peter G. Peterson Foundation). This is because the government has less money to spend when it is occupied in paying off the national debt. Christopher Columbus Business Department Leader Mr. Kevin Corazon says, “If you have to pay more interest, there is less money to spend on everything else. When you have less money to spend on everything else, there is less money to give to the small business owners, there is less money to give incentives to the larger companies to hire people.” From his perspective, there is a domino effect of disaster that is caused by increasing the national debt.
To add further complexity to this issue, there is the situation of the debt ceiling and the debates in Congress over raising it. The debt ceiling is a self-imposed constraint on Congress to prevent it from raising the national debt, but it can result in negative economic consequences if not used properly. In recent months, Congress has been approaching this ceiling, so there have been calls to raise it. If the ceiling is not raised, then the government would default on its debt and spending programs would have to be cut, which would be a disaster for the U.S. economy. The reason Republicans have been refusing to raise the ceiling is because they dislike the political policies being pushed by the Democrats that include more spending. However, Republicans, as mentioned before, have also supported policies that have significantly added to the national debt, so this appears to be more of a political game than a genuine worry about the debt. Thus, to prevent default and economic catastrophe, the debt ceiling must be raised by Congress or abolished altogether because of its inefficient way of solving this problem. The intention of managing the debt is right, but, if not raised, the debt ceiling would cause serious harm to the U.S. economy. That is why Mr. Ciocca says the ceiling “must be raised.”
The issue concerning the debt, then, is not whether the ceiling should be raised. Congress must raise the inefficient ceiling if it wants to avoid economic catastrophe. The real issue is how Congress should manage its budgets in the future to gradually pay off the national debt. The resolution will require cooperation between parties and accountability, which could be difficult to achieve. Congress has to work together to focus on the people and not the politics, and this will require compromise. The Republican Party generally wants to cut spending to pay for the debt, while the Democrats want to continue spending but increase taxes. “The reality,” Mr. Ciocca says, “is that we have to do a little bit of both. Accountability indicates that the only way to get our way out of this is like the typical family. You have to bring more money in… We have to look at the possibility that taxes may have to be raised, and we also have to look at the possibility that spending may need to be cut.” Mr. Ciocca then sees cooperation as the solution. He wants our leaders to recognize their responsibility towards the people and not towards political ideologies. They must recognize that they are all burning the proverbial house down and that their way out of this situation involves sacrifices from both sides. Managing the federal budget better includes higher taxes and lower spending, and only when these things are accomplished can we truly gain freedom from the national debt.
There are people, however, who are more pessimistic about this issue. Columbus teacher Mr. Philip Santa-Maria says that this solution will require younger generations to pay more for less, which is highly unpopular. He admits this is the only way to pay off the national debt, but he finds it unlikely that this plan will be executed. “Imagine two people are running for your congressional seat,” he says, “and one of them tells you our government is going to have the best military in the world that we will fund forever and that they are going to lower your taxes… The other candidate is going to say I am going to raise taxes and cut government spending, so you are going to get less. Who are you going to vote for?” Mr. Santa-Maria remains skeptical of the feasibility of this budgeting solution in our current political sphere. However, this is the only solution available even though it requires bipartisan support and cooperation from Congress to serve the public interest.
Therefore, our only real way out of this public debt impasse is cooperation and agreement. Both sides have to lose something in order to move forward and ensure a better future for United States citizens. Congress can no longer kick the can to the next generation, as Mr. Santa-Maria says. It is imperative that a Congress dedicated to the public purpose addresses this national debt issue now by finally managing its budgets and working together.