After the fiscal cliff deal was made on Tuesday, Representative Ron Paul wrote “…that government spending has already pushed Americans over the cliff.” He writes of a fiscal cliff that will “destroy our economy entirely” due to the government’s refusal to allow citizens to spend their money as they wish and high debt levels. But Paul is wrong: the U.S. has not fallen over the cliff, although we are headed that way.
The U.S. national debt stands at $16.4 trillion, or $146,000 dollars per taxpayer. These numbers are expected to climb to $22.4 trillion, or $183,867 per taxpayer respectively, by 2017. And yet, Congress and President Obama enacted a fiscal cliff deal that will increase our debt by an additional $4 trillion according to the Congressional Budget Office. It certainly seems that the representatives of the American people will continue to vote for increased debt, just as they have for more than a decade.
If we continue these spending policies, our debt will climb ever-higher and eventually, our nation will come to a point where we are asked to pay our debt, but can’t. At that point in time, we will face default or inflation (via printing money to pay down the debt), and the economy will be crippled. Ron Paul’s statement that we are over the fiscal cliff certainly seems to be justified when looking at government spending trends, but we have not seen our economic doomsday just yet.
We as a nation still have a chance to reverse the trends of our government. In fact, if we simply freeze spending at 2013 levels ($3.8 trillion), we would be running a surplus by 2016 at projected revenue levels. By 2020, that surplus would grow to $1.1 trillion, and our debt would be paid off completely in a matter of years. Even if these CBO numbers are off by a few hundred billion, the debt would be paid.
Thus, Ron Paul is partly correct: We as a nation are headed toward the real fiscal cliff that is default, but we are not there yet. We can still make the choice to avoid economic disaster. As the American people are enticed by government spending that favors them individually, I concede that the needed decrease in projected expenditures is unlikely, but it is not impossible.
Hopefully, the American people will come to realize the danger of debt and vote for politicians who will take appropriate action “before government spending, taxing, and inflation destroys our economy entirely.”