WASHINGTON (AP) – THE ISSUE: The federal government is borrowing about 1 out of 7 dollars it spends and steadily piling up debt – to the tune of about $14 trillion held by investors. Over the long term, that threatens the economy and our pocketbooks.
Most economists say rising debt risks crowding out investment and forcing interest rates up, among other problems. At the same time, rapidly growing spending on federal health care programs like Medicare and the drain on Social Security balances caused by the rising tide of baby boomers could squeeze out other spending, on roads, education, the armed forces and more.
It takes spending cuts, tax increases or both to dent the deficit – and presidential leadership. Lawmakers instead prefer higher spending and tax cuts.
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WHERE THEY STAND