On June 6, 1944, D-Day, General Theodore Roosevelt, Jr. landed with his troops on Utah Beach in Normandy France. The son of former president Theodore Roosevelt, he was the oldest man to go ashore that day and the only one with the rank of General.
What General Roosevelt soon discovered was that a combination of factors beyond his control had driven his landing party more than a mile south of where they had planned to hit the beach. He made a quick reconnaissance, gathered his top staff and issued an order: “We’ll start the war from right here.”
Roosevelt’s words that day have been quoted many times and in many contexts because they reflect a pragmatic determination to stick with an objective even in the face of unexpected circumstances. They remind us that when original plans are upended the mission still continues.
As we mark the 76th anniversary of D-Day this year, it is useful for those of us who are concerned about the nation’s unsustainable fiscal path to keep Roosevelt’s words in mind.
The national debt has been rising precipitously. In response to the COVID-19 pandemic, Congress and the president have approved four bills totaling almost $3 trillion. The House of Representatives recently passed another bill that would roughly double that by adding about $3 trillion in new aid to states, territories and localities, businesses, and individuals. While Senate leaders oppose this bill and the president has threatened a veto, there is still a consensus that the federal government will need to provide more support for the economy in some form.
Before the pandemic began, the Congressional Budget Office was projecting a budget deficit in 2020 of just over $1 trillion on its way to nearly $1.8 trillion in 2030. Debt held by the public was projected to rise from 81 percent of GDP in 2020 to 98 percent in 2030.
This outlook was particularly alarming because the debt was rising faster than the economy even with a record-long period of sustained economic growth. In fact, annual budget deficits had grown from $442 billion in 2015 (2.4 percent of GDP) to $984 billion in 2019 (4.6 percent of GDP). During that time, debt held by the public increased from 72 percent of GDP to 79 percent.
That was the situation we thought we would be dealing with: an unsustainable fiscal path driven by increased benefits for an aging population, rising health care costs, and a series of imprudent tax cuts. It was bad enough. Then came the pandemic.
As a result of COVID-related legislation, the CBO now projects a deficit of $3.7 trillion in 2020 (17.9 percent of GDP) with the debt reaching 101 percent of GDP. All of this assumes no new legislation, which means the numbers are likely to get even worse when the CBO updates its 10-year projections later this year.
With deficit numbers rising this fast, some in the “deficit hawk” community might be tempted to give up, assuming that fiscal responsibility is a lost cause. That would be a mistake.
For one thing, this year’s spike in deficit spending is not the result of fiscal irresponsibility. It is an economically and humanely justifiable attempt to provide support for those devastated by the deliberate decision to put the economy into a coma to fight the spread of the virus.
Under the unique and dire circumstances we now face, it is more responsible to support the economy through higher debt than it would be if we did nothing. The risks of higher debt, which can and should be remedied when the pandemic passes, are less than the risks of widespread business failures, long-term unemployment, and a higher death toll, the harmful effects of which would linger for many years.
The good news is that when the pandemic is under better control, allowing businesses to safely reopen, the economy should begin to revive and the “sacrifices” we’ll need at that point to put the debt on a sustainable path are not nearly as great as the sacrifices made on our behalf by the heroes of D-Day.
Like General Roosevelt on D-Day, we have been blown off-course but we should not give up the fight for fiscal and generational responsibility. No matter where this pandemic eventually lands us on the fiscal front, we should regroup and declare “we’ll start the war from right here.”
