By: AIF Staff
Earlier this week, American Idea Foundation President and former Speaker of the House Paul Ryan penned an opinion piece for the latest edition of The International Economy focusing on America’s fiscal policy. Throughout his career in Congress, Speaker Ryan advocated for serious reforms to the federal government’s spending patterns and as our national debt stands at over $28 trillion, this issue has become more urgent than ever before.
To be clear, both parties – Democrats and Republicans – share responsibility for this problem and both parties will be needed to solve it. While the federal government’s response to COVID-19 was both necessary and appropriate, the massive increases in spending that were required to address the pandemic will have a profound effect on our fiscal trajectory in both the short and long term.
Given the growing size of our debt and deficits, the time for kicking the can down the road must end. A failure to act will result in real consequences for millions of Americans who rely on critical safety-net programs like Social Security, Medicare, and Medicaid.
Fortunately, as Speaker Ryan argues, a framework does exist for legislators to come together and fix our fiscal policies. The 1981 “Greenspan Commission” provides an example of how Congress can successfully tackle these problems and lawmakers would be wise to learn from its lessons. Additionally, the bipartisan TRUST Act, formally called the Time to Rescue the United States’ Trusts Act and which would setup commissions to solve the looming shortfalls in critical government programs, provides legislators with a great place to start.
Check out Speaker Ryan’s full op-ed here or scan some excerpts below.
“COVID-19 has temporarily changed every facet of American life. Our nation’s fiscal policy is no exception, and our debt trajectory has not been immune to the devastating impact—both short-term and long-term—of this virus…. Mitigating the immediate economic turbulence caused by COVID-19 was critical and necessary but in the long-term, lawmakers cannot turn a blind eye to our fast-growing debt and deficits.
“Interest rates cannot stay at historic lows forever, nor will inflation and we can’t tax our way out of this problem without cannibalizing economic growth and hurting hard-working families. As it stands, our monetary policy and our fiscal policy are on a collision course.”
“If the economics profession successfully advances this notion that debts don’t matter (or that they matter much less than previously believed), and if policy makers continue to take the easy path of kicking the can down the road, then this course will surely end in catastrophe. The advancement of digital and crypto currencies alone will bring a level of accountability to fiat currencies that cannot be ignored, not to mention that the assumptions and projections upon which fiscal stimulus policies rest are rarely realized. Ultimately, a failure to act would impose a painful lesson onto society that is borne by our children and grandchildren.”
“As head of the House Budget Committee, year after year, I offered proposals to balance the budget and pay off the debt. These budgets would pass the House annually before languishing in the Senate. It has become clear to me that one party will not solve this problem. Compromise and consensus are required. Legislators must no longer view our debt and deficits as a partisan problem, but a math problem.”
“The United States cannot continue spending, printing, and borrowing money that it simply doesn’t have. Our fiscal policy has real consequences for real people, as millions of Americans rely on federal safety net programs, which is precisely why lawmakers must embrace a spirit of compromise, utilize models that have worked in the past to address spending issues, and put our fiscal trajectory back on the right track.”
The American Idea Foundation will continue to focus on solutions that promote economic opportunity and upward mobility and by tackling our debt and deficits in a responsible way, more Americans will benefit from our safety net being on sounder financial footing.