The words “default” and “dysfunction” are again showing up on the front pages as the debt ceiling suddenly looms along with the Taxmageddon deadline. Treasury Secretary Tim Geithner’s letter to Congress, raising the specter of “default” and “extraordinary measures,” set off much of the new hand-wringing. Journalists and pundits lecture Congress about its “dysfunctional” failure to raise taxes and promise to cut spending.
But as I told a journalist who was very concerned about dysfunction the last time the debt ceiling began to bite, the real problem is not the dysfunctional process that’s getting all the headlines, but the dysfunctional substance of governance. The real dysfunction is a federal budget that has doubled in 10 years, an annual deficit of some $1.5 trillion, and a national debt bursting through its statutory limit of $14.3 trillion and approaching 70 percent of GDP.
We’ve become so used to these unfathomable levels of deficits and debt—and to the once-rare concept of trillions of dollars—that we forget how new all this debt is. In 1981, after 190 years of federal spending, the national debt was “only” $1 trillion. Now, just 30 years later, it’s more than $16 trillion – and all that debt rung up during a period without a major war or Great Depression. Here’s a graphic representation of dysfunction (through mid-2011; now you can visualize the blue line bursting through the $16 trillion level at the top of the chart):
Those are the kinds of numbers that caused the rise of the Tea Party and the election of members of Congress who vowed to stop out-of-control spending and debt. It’s too bad that Congress hasn’t been able to rein in spending without the pressure of a debt ceiling or a “fiscal cliff.” But it hasn’t. And so if fiscal conservatives in Congress can use those deadlines to put some caps on the money-shoveling, more power to them.