Curbing Spending Now Helps Fix Future Debt Crisis, Current Jobs Crisis

Op-Ed

On June 22, the non-partisan Congressional Budget Office (CBO) released their annual long-term outlook on the federal budget and the economy. The picture they painted was sobering, to put it mildly. Nowhere was the outlook gloomier, however, than in addressing our federal debt and the effect our debt could have on job creation, income growth and economic prosperity.

Over the last 40 years, America's national debt has been about 37% of the size of our entire economy, and that's right about where it stood in 2008. But government policies enacted since 2008 have already exploded our debt to nearly 70%. The CBO analysis shows that within a decade our debt will likely exceed the size of our entire economy.

The human impact of this looming debt should concern us all. According to CBO, "large budget deficits and growing debt would reduce national saving, leading to higher interest rates, more borrowing from abroad, and less domestic investment." In other words: High levels of debt will lead to higher interest rates and fewer business and education loans. Ultimately, that lack of investment leads to fewer jobs and lower incomes.

As I've travelled across southern Indiana, I've had the opportunity to tour factories in Salem, Corydon and North Vernon; hold business roundtables in Bloomington, New Albany and Seymour; and speak before Chambers of Commerce in Lawrenceburg, Jasper and Scottsburg. The business owners and job creators I've met with say out-of-control Washington spending, deficits and debt have them worried about higher interest rates and tax rates. Add in fears about higher energy costs and health care costs, and it's easy to see why many are thinking twice before starting new businesses, expanding existing businesses or hiring new employees. Perhaps it's not surprising that the national unemployment rate remains stuck above 9%.

As bad as the current situation is, the future crisis outlined by CBO would be much worse. The bad news is that if we fail to boldly change course, this crisis scenario isn't far away. The good news is that it is entirely predictable, and we can still avoid it. But as we near those irreversible levels of debt, this much is clear: If we want to save our economy in the long term, and if we want to get it moving in the right direction in the short term, we must address our spending problems.

So as Washington debates budget deficits, debt limits and a whole host of other important issues, remember that spending control is a key ingredient to job creation and income growth. While other approaches may help, curbing our spending appetites today is the single greatest step we can make towards putting Hoosiers back to work in the future.

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