The temptation to live beyond our means may be eternal, but things weren’t always this bad. In the early 1980s, the bipartisan Greenspan Commission crafted a package of Social Security reforms that extended the program’s solvency by decades. In the 1990s, a Democratic White House and Republican Congress ran actual budget surpluses. By 2001, Federal Reserve chair Alan Greenspan, who led that eponymous 1980s commission, was even fretting about the headaches that would result if Washington paid off the national debt.
Greenspan needn’t have worried. Between the Iraq War, the Great Recession, and the Covid-19 pandemic, policymakers justified big tax cuts and massive new outlays. The result: enormous structural deficits and a federal debt that quadrupled from $9 trillion in 2007 to $36 trillion in 2025. Last year, the federal government spent $7.1 trillion, of which $4.4 trillion was spent on benefits for individuals, with 62 percent going to those aged 65 and over (mostly for Social Security and health care). For every six dollars spent on seniors, a single dollar went to those under age 26 (mostly for Medicaid, food stamps, and education).
Oldsters get free stuff; youngsters get stuck with the bill.
It’s not like Washington can afford any of this. The U.S. borrowed $1.8 trillion last year, will borrow another $2 trillion this year, and is looking at steadily growing debt as far as the eye can see. Last year, at a 10-year cost of $245 billion, Republicans wedged President Trump’s tax breaks for auto loans, tips, overtime, and seniors into the reconciliation bill. Now, pols on both sides of the aisle are proposing new tax breaks for teachers, veterans, police, renters, and seniors.
As ever, The Dispatch’s Kevin Williamson brings an acerbic clarity to the numbers:
U.S. government debt has crossed a red line: Debt held by the public now exceeds 100 percent of GDP . . . On top of the $31.3 trillion in federal debt per se, there’s another $88 trillion or so (some estimates are higher) in unfunded liabilities for major entitlements such as Social Security and Medicare . . . Call it $120 trillion in the hole just to keep the number simple. That is just a little bit more than the total economic output of the entire human race in 2025.
Where’s all this money going? Williamson explains:
This debt is not driven by incontinent spending on a selection of boutique federal programs that you and your friends don’t like. The main drivers of our debt are Social Security, Medicare, Medicaid and other medical entitlements, national security, and interest on debt already incurred . . . At present, Social Security by itself accounts for 22 percent of all federal spending; interest payments are 14 percent; non-Medicare health spending is 14 percent; [and] Medicare is another 14 percent.
In short, two-thirds of federal spending is for Social Security, health care (mostly for seniors), and interest on all the money we’ve borrowed. The U.S. will spend more than $1 trillion next year just in interest on the debt; interest on the debt is due to top $2 trillion a year by 2035.
Meanwhile, in last year’s reconciliation bill (the infelicitously named “One Big Beautiful Bill Act”), Republicans took a budgetary process designed to help Congress balance the books and added more than $4 trillion in debt. With gas prices up due to the Iran War, President Trump is urging Congress to suspend the gas tax, potentially adding billions to the debt. Then there are the smaller exercises in plunder, like the $1.8 billion federal slush fund that Trump’s Department of Justice has devised for allies who claim they were targeted by the Biden administration.
Again, it all adds up to more free stuff for grown-ups and more debt for kids.
This puts me in a quandary. I just can’t muster much enthusiasm for trimming outlays on education data collection or Title I when those savings look like rounding errors compared to new tax breaks or monthly outlays for Medicare.
Look, I’ve spent a quarter-century railing against ineffectual education spending. I’m appalled that New York City spends $40,000 a kid to deliver dismal results, that $200 billion in Covid relief funds didn’t do much for students, and that taxpayers heavily subsidize enrollment at colleges that charge tens of thousands of dollars for eight courses and a dorm room. I’ve warned that bailouts enable bad spending choices and endorsed aggressive efforts to downsize the federal education apparatus.
But how can I decry spending on federal ed programs that nominally target those under 26, when these kids will inherit the tab for the self-dealing indiscipline of their elders? It’d be one thing if policymakers were cutting spending and raising taxes across the board in an all-hands push to get our affairs in order. But it’s nonsensical to give entitlements a pass and then pursue symbolic savings in education, one of the few outlays that are plausibly an investment in more than next week.
