December 28, 2012
While lawmakers negotiate ways to avoid the Taxmageddon tax increases and the so-called fiscal cliff, they are ignoring the real issue at hand: runaway entitlement programs and interest payments that account for more than half of federal spending.
Combined with interest payments on the debt, Social Security, Medicare and Medicaid (including Obamacare) are driving the United States toward fiscal collapse.
The Heritage Foundation’s Romina Boccia explains:
By 2025, the major entitlement programs and net interest together will eat up all tax revenues collected in that year. This implies that all other government spending, including for national defense, would have to be financed by borrowing.
This projection by the Congressional Budget Office assumes that historically low interest rates continue at least until 2015 and that inflation will be modest, inching up toward 2 percent of gross domestic product (GDP) by 2017. Nevertheless, spending on interest on the debt would double before the end of the decade.
Do you think Congress should find ways to rein in overspending rather than debating whether and how to increase taxes?