Congressional Fiscal Commission the Best First Step to Address Nation’s Debt Crisis – By Paul Winfree (Real Clear Policy) / Dec 5, 2023
The COVID-19 pandemic was the catalyst for a tsunami of federal spending that has since continued apace. What’s worse, since 2020, the United States has paid for 76 percent of the additional spending with interest-bearing debt. That’s more debt as a percent of total spending than the federal government issued to pay for the Civil War and both the World Wars.
More than ever before, we need a fiscal commission to confront the looming debt crisis head-on, and it is extraordinarily welcome news that House Speaker Mike Johnson (R-LA) has embraced legislation to impanel one.
Some in Washington have argued for years that historically low interest rates on public debt were permanent, and that justified more debt-financed government spending. However, interest rates on public debt have been rising steadily since 2020. Today, the Treasury Department is routinely forced to roll over debt at much higher rates relative to when it was first borrowed. For context, the last time that interest rates on debt were this high, the amount of debt held by the public was $3 trillion less than the amount of debt that is maturing in the next year.
Higher rates are being driven by two forces. The first has been persistent inflation. Though it is easing slightly, prices remain almost 20 percent higher than they were at Biden’s inauguration.
