Some economists say there is little risk in adding more debt because interest rates are at historic lows. But once again, that logic ignores the future. Interest rates can, and inevitably do, rise. In its January 2020 budget review, issued prior to the latest spending spree, the Congressional Budget Office warned that net interest costs would rise steadily over the next ten years due to accumulating debt and rising interest rates. Couple that with an aging population and rising healthcare costs, and we face a perfect storm as interest payments consume a significant portion of the annual federal budget.
Congress will then be forced to make tough decisions, something it has proven to be incapable of doing. When faced with a choice between spending money on popular social programs such as Social Security, Medicare, and food stamps, or on more traditional but less flashy functions of government such as defense, protecting our borders, and infrastructure repair, one can easily guess what the votes will be. Do we want our children to live in a country that can no longer afford to spend on national defense, as Defense Secretary Mark Esper just warned about?