Issue Brief posted June 18, 2013
Soaring National Debt Remains a Grave Threat
Federal government debt has nearly doubled since President Barack Obama took office and is projected to increase 50 percent over the next decade—and then rise rapidly thereafter—under existing policies. As federal debt has soared, so have concerns about America’s future.
Used properly, debt can safely finance private and government investment in productive capital to…
Backgrounder posted June 18, 2013
The Many Real Dangers of Soaring National Debt
Federal government debt has nearly doubled since President Barack Obama took office. Recent progress toward reducing the annual budget deficit is welcome, yet federal debt is still projected to increase 50 percent over the next decade—and then rise rapidly thereafter—under existing policies. As federal debt has soared, so have concerns about America’s future. Used…
Issue Brief posted May 1, 2013
Debt and Growth in a Time of Controversy
The weight of the evidence indicates that high debt slows growth, but there is no magic threshold above which any country at any time will experience slower growth. This truth has been illustrated in the recent controversy around “Growth in a Time of Debt,” an academic paper by Carmen Reinhart and Kenneth Rogoff.
Reinhart, Rogoff, and Rebuttals
“Growth in a Time of…
Issue Brief posted March 5, 2013
Research Review: Spending Cuts Are Better Than Tax Increases
Governments regularly run fiscal deficits and periodically awake to the need to restore balance to their finances. These episodes of “fiscal correction” or “austerity” may emphasize either tax increases or spending cuts. As the United States faces an out-of-control budget deficit and trillions in unfunded promises to future retirees, the question looms large: Tax more,…
Issue Brief posted February 22, 2013
High Debt Is a Real Drag
Three teams of economists have separately shown that high government debt has a negative effect on long-term economic growth. When government debt grows, private investment shrinks, lowering future growth and future wages.
Estimates across advanced economies show that debt drag reaches large and statistically significant levels as debt grows, with the worst effects…
Backgrounder posted February 12, 2013
How the United States’ High Debt Will Weaken the Economy and Hurt Americans
Growing federal debt also would increase the probability of a sudden fiscal crisis, during which investors would lose confidence in the government’s ability to manage the budget and the government would thereby lose its ability to borrow at affordable rates. Such a crisis would…probably have a very significant negative impact on the country.
-Congressional Budget Office,…
Backgrounder posted January 8, 2013
U.S. Government Increases National Debt—and Keeps 128 Million People on Government Programs
The number of people receiving benefits from the federal government in the United States has grown from under 94 million people in 2000 to more than 128 million people in 2011. That means that 41.3 percent of the U.S. population is now on a federal government program. The 128 million is an estimate based on the recently released March 2011 U.S. Census Bureau Current…
Issue Brief posted November 28, 2012
What’s in the Fiscal Cliff?
The nation is now firmly on track to go over the fiscal cliff in January 2013 unless Washington takes action. The uncertainty leading up to the fiscal cliff—especially Taxmageddon—is already hurting the economy today and, according to projections by the Congressional Budget Office, could send the country back into recession in 2013.
Individuals, families, businesses,…
Backgrounder posted July 24, 2012
What Debt Crisis? A Default Primer for Governments
A government that systematically finances spending through unsustainable levels of borrowing eventually finds itself in a crisis. The crisis is often triggered when economic growth slows or interest rates rise, leading to a vicious cycle of larger and larger interest payments. Often, such crises result in default on government…
Audio Recorded on March 24, 2012
Don't Look Now But Our Debt Is Getting Worse
From The Heritage Foundation, I'm Ernest Istook.
No matter how deep in debt you might be, it could be worse.
You could be Uncle Sam.
During the eight years of George W. Bush's presidency, our national debt increased by $4.89-trillion. That's bad. But in only…
Issue Brief posted March 21, 2012
The Ryan Budget: Confronting the Nation’s Spending Crisis
In the few months since Washington’s dramatic debt ceiling confrontation, America’s fiscal situation has only worsened. Federal spending is set to soar past previous record-shattering levels, endangering the economic future of the nation. This is a moral issue because younger generations will be forced to bear either staggering levels of debt or crushing taxes, or both.…