Lowering national debt is as easy as 1, 2, $4.95 billion!
The U.S. national debt has reached the highest levels in history outside of a war or recession. At current spending rates, the national debt will reach a record high by 2034. Social Security, Medicare, and Medicaid make up half of the federal budget, according to Tyler Evilsizer, Deputy Policy Director for the Committee for a Responsible Federal Budget (CRFB), who led a Debt Fixer event hosted by the Program in Practical Policy Engagement (P3E) at the Ford School on September 18.
During the interactive workshop, students broke into groups of 6 and were given an hour to work through the CFRB’s online questionnaire—a tool that illustrates the tradeoffs involved in setting fiscal policy. The goal: to decrease the national debt by 16 percent in 10 years, a decrease of $4,950 billion, and 45 percent in 30 years.
Students talked through a series of approximately 100 tough policy options, ranging from ‘Expand Obamacare with Public Insurance Plan raising debt by $3940 billion,’ to ‘Raise the Retirement Age to 69, decreasing debt by $70 billion.’ Then they watched how their decisions impacted the federal budget and national debt. By the end of the workshop, nearly every group lowered the national debt by at least 16 percent, but only one group was able to reach the long-term goal of lowering the national debt by 45 percent.
The majority of students’ choices led them to significantly increase taxes and decrease spending. When Evilsizer asked who would run for re-election based on the changes they had made to the budget, the entire crowd came to a resounding ‘no’. Focusing specifically on Social Security, Evilsizer explained that spending will have to be reduced or taxes will have to be raised. He continued “The longer we wait to do so, the more burden the current generation will have to take on compared to the baby boomer generation.”
Nearly all groups were unable to reach a consensus on certain tough questions and, as a result, chose no answer at all. Evilsizer explains that this is common practice in the public sector, with many officials saying “No one likes the current system but we can’t agree on how to change it, so let’s just leave it the way it is”. Evilsizer said “in the microcosm you see why this is difficult…in some ways budgeting is just an exercise in priorities”.
Interested in the Debt Fixer exercise? Try it out here.
The Program in Practical Policy Engagement (P3E) is a university–wide resource housed at the Ford School where it can leverage existing expertise and interdisciplinary approaches to generate policy–relevant research, analysis and learning, as well as improvements in organizational practice.