There’s debate over whether the President’s fiscal commission should focus on total federal debt or just the part of the debt that is held by private investors and foreign countries. Either figure, however, is high by historical standards.
No one can say for sure how much more the government can borrow without seriously jeopardizing the country’s economic future. But this uncertainty shouldn’t be an excuse for inaction, as some analysts seem to suggest. An analogy might be speeding down a narrow, winding country road at 80 miles an hour. Since nothing catastrophic has happened yet, can we push it up to 90? To 100? It’s hard to say for sure because we don’t know what’s around the next bend. But at some point soon, easing up on the accelerator would be a wise thing to do.
Reasonable people can differ on how quickly the government should start reducing deficits while the economy is still shaky. But Washington should at least start developing a credible plan to deal with the basic structural problems in the federal budget that are projected to produce massive deficits even in good economic times.