By Gregory Mankiw, President, SummerHill Advisors
The U.S. public debt stands at around $21 trillion. The balance sheet of the Federal Reserve currently contains $2.4 trillion in debt that will be paid off over the next two decades. Meanwhile, federal spending in the fiscal year 2018 alone reached a record of $4.3 trillion, meaning the national debt is set to rise to around $23 trillion by the end of this fiscal year. Needless to say, any kind of discussion about the nation’s debt and debt-ceiling policy that doesn’t include some mention of current and future spending is far too narrow.
But on October 5, the Bipartisan Policy Center, led by former Democratic senators Kent Conrad and Chuck Hagel, published the Debt Ceiling Project, a document that analyzed the issue, and one that included some suggestions on how to strengthen fiscal policy, including the establishment of a new debt ceiling-expansion authority and clear spending constraints. The report’s recommendations were included in an analysis of that day’s national newspapers.
Debt Ceiling Window Is Narrowing, Bipartisan Policy Center Warns The Fiscal Commission’s Michael Boskin concludes with mixed results:
While much of the Washington attention on the debt ceiling has focused on shutdown impasses and partisan bickering, much more can be done to get fiscal policy back on track. A need for bipartisan fiscal policy solutions remains paramount to meeting the challenges of the current economy and laying the foundation for economic growth and stability for years to come.