The Consequences of Inaction

AUTHOR: John Palmer, Co-Chair, Committee on the Fiscal Future of the United States
Dec 28, 2009

One reason it has been relatively easy for most policy makers and the public to ignore the nation’s huge fiscal problem is that, to date, the United States has had no difficulty borrowing to finance current spending. And large-scale federal government borrowing is not necessarily a bad thing, any more than it is when a family takes out a mortgage it can easily afford to purchase a home. However, spending more to pay interest on debt means that less is available for other needs; and borrowing when there will not be sufficient income in the future to repay debt is a serious problem.

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