Washington’s fiscal failings mirror Europe’s economic mess.
Washington’s spiraling debt trends are simply unsustainable. If you doubt this, consider the fiscal crises, protests and political chaos occurring beyond our shores.
Governments across the globe cumulatively spent on average $1.3 trillion annually on debt interest payments in the 2010s. Soaring debt and loan rates have escalated this year’s interest costs to $2.7 trillion. In five years, that number is projected to hit $3.9 trillion. This avalanche of borrowing costs represents the latest sign of long-term debt binges that have been mostly driven by aging populations and sluggish economies.
Let’s begin with Britain’s fiscal mess. The combination of aging baby boomers and falling fertility rates (now below 1.5 per woman) has swelled senior and health benefit costs beyond what its stagnant base of taxpaying workers can finance. Because economic growth is roughly the sum of labor force expansion and labor productivity increases, this workforce slowdown has strangled the British economy, especially with productivity trends also weak. Consequently, the economy has grown less than 2 percent annually since 2000 — and government forecasters see no improvement coming.
Continue reading the entire piece at The Washington Post (paywall)
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Jessica Riedl (formerly Brian Riedl) is a senior fellow at the Manhattan Institute. Follow her on Twitter here.
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