The ever-accurate Kevin Williamson of National Review has an excellent new column outlining some of the major concerns of large debt. Here is his best point:
We have entered the realm of the vicious circle: Debt and deficits will slow down economic growth, and slower economic growth will make our debt and deficits worse.
Williamson is exactly correct. America’s economy is slowing because of our debt, and the Director of the Congressional Budget Office (CBO) has already admitted the CBO’s May 2013 projection of the budget deficit will be low by about $40 billion because the economy has grown unexpectedly slowly.
This will only get worse as the debt grows and the economy slows because of the debt, thus increasing the size of deficits and the therefore the debt. The cycle becomes self-sustaining.
Most in Washington keep pretending America can continue spending its way into oblivion without major consequences. Williamson’s column is a reminder that not only is it impossible, but we’ve probably passed the point of no return. Only major change, led by the Tea Party, can change America’s financial trajectory.