Letters to the Editor: Default by choice

In his recent article, "Bigger Isn't Better," Kyle Schmauch referred to our large national debt in an attempt to make an unrelated point about the size of the US government. "The [debt] crisis stems from a government that has grown too large and centralized," said Mr. Schmauch. This is untrue. Speaking broadly, debt accumulates when a government spends more than it takes in as revenue. If we didn't have to borrow to make up for our perennial fiscal deficits, we wouldn't take on debt, irrespective of how large our government is.

What is more, the size of the US government hasn't changed all that much over the last half-century, hovering at around 37% of GDP. What has changed is the gulf between revenue and expenditure. As recently as the late 1990s, we had a shrinking debt burden and projected fiscal surpluses. But, from roughly year 2000 on, we have been far outspending what we collect in taxes. This is largely due to cuts in taxation without concomitant cuts in spending, and, more recently, temporary stimulus measures aimed at aiding the struggling economy. As the gap between spending and revenues continues, so will our growing debt burden.

Even so, to call our current problem a debt crisis is to misunderstand our predicament. We do not have a debt crisis in the short-term. On current trends, we have every ability to fund our debts well into the future. Things only start to get uncomfortable some years down the line--and then almost solely because of rapidly rising healthcare costs. (Indeed, if we were to bring our high healthcare costs more in line with the rest of the developed world, the size of our government would shrink dramatically.)

Our current crisis is not a debt crisis--it is a political crisis. We can pay the debts, and we would pay the debts, except for one political party threatening not to pay the debts. Only in return for hefty concessions will Republicans generously refrain from not paying and ruining our credit. It is now at least conceivable that the US, by many measures the most stable and prosperous country on Earth, will default by choice. It's absurd.

Logan Timmerhoff, senior (economics, political science)