President Trump and Democratic leaders have discovered the one policy that unites Washington: spending money we don’t have. Yet their bipartisan pledge to spend an added $2 trillion on infrastructure over the next decade faces serious obstacles if these leaders are to responsibly improve our infrastructure.
First, Washington should spend only as much as it is willing to offset with other savings. Putting $2 trillion on the national credit card would boost deficits that are already on course to surpass $2 trillion a year within a decade, due mostly to entitlements.
These deficits are projected to push annual interest costs over $1 trillion. And if interest rates merely return to 1990s levels, interest on the debt will become the largest part of the budget. Yet Democrats are already calling for $40 trillion in other new spending over the decade, and Republicans just cut taxes by $2 trillion. Something has to give.
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