Time to eat your spinach, Washington.
The United States is on an unsustainable fiscal trajectory. That does not mean that there is an economic crisis right around the corner, today, tomorrow, or in six months. But if nothing is done, entitlement spending will grow beyond our ability to pay for it, even with substantial future tax increases. Military spending is a heavy contributor to our fiscal burden, too, and it could and should be reduced, but that will first require rethinking our national-security posture and our worldwide military capabilities. For the military, the mission determines the budget, but much of federal spending would be more properly organized the other way around. And as much fun as it is to mock Harry Reid’s federally subsidized cowboy-poetry festivals and the critical national effort to get monkeys high on cocaine, basically all of federal spending goes to a handful of programs: Social Security, Medicare, Medicaid, national defense, and interest on the debt. Everything else — from the federal highways to staffing the embassies to the FBI — adds up to about 20 cents on the federal spending dollar. If interest rates go up, then debt service could become a radically larger expense — think about an outlay roughly the size of the Department of Defense budget — very quickly.