Consequences Of The U.S. Deficit
LEILA FADEL, HOST:
The U.S. budget deficit is ballooning, headed to over a trillion dollars by 2020 according to projections just released by the Congressional Budget Office. Why? Tax cuts and increased government spending, plus tariffs dragging down economic growth. Michael Peterson is CEO of the Peter G. Peterson Foundation, a nonpartisan fiscal watchdog group.
MICHAEL PETERSON: Thank you very much.
FADEL: So what does that mean for, for example, a young American just starting her career? How will a trillion-dollar deficit affect her?
PETERSON: Well, the deficit places a burden on the next generation. So we already have $22 trillion of debt on our books today and this has driven - the most important being demographics. We have a very significant baby boom generation that's just beginning to enter retirement. And when they retire, they come out of the workforce and stop paying in and go into the retirement system and start taking out. So each one of them sort of is a double whammy. So what happens when you have a huge level of debt like this is that it comes with an interest burden. So today, we're paying a billion dollars a day in interest.
FADEL: Oh, wow.
PETERSON: And that's a billion dollars that can't go into something else. It can't go into a safety net program or an investment or international defense, or it's a billion dollars that we need to collect from our citizens that we wouldn't otherwise have had to.
FADEL: Now, your work is really dedicated to getting politicians to pay attention to this debt. Is it working?
PETERSON: Well, I would say they're certainly not paying enough attention. We're in this situation due to a significant lack of leadership and lack of fiscal responsibility. The truth is the vast majority of Democrats and the vast majority of Republicans want our politicians to spend more time addressing this issue because they may not understand all the effects and all the different numbers, but they know it's not a good thing for them and their future and their kids and grandkids.
FADEL: These two parties have really different economic approaches. How do you talk to both parties and how do you appeal to them to focus on what you think is so important in this debt?
PETERSON: This is too big a challenge for any one party to take and solve on their own. I don't think any party would ever do that. And even if they did, it probably wouldn't last. So it's the classic type of problem where we all need to come together and solve it. And I think there are strong arguments on both sides of the aisle in favor of addressing this.
So if you're a progressive and you care about the safety net or you care about inequality or you care about climate change or infrastructure, having this debt burden makes it more difficult to tackle all of those issues because there's just less resources available for these programs.
If you're on the conservative side and more for limited government, you know, we have a $365 billion interest tab this year - that's a billion dollars a day - will be exclusively used to pay interest. So that's theoretically more taxes than we would need to burden our citizens with. So, again, whether you're a Democrat or Republican, having more debt is not helpful.
FADEL: That's Michael Peterson. He heads the Peter G. Peterson Foundation.
Thank you so much.
PETERSON: Thank you very much.
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