National debt will be next president’s most-important challenge

By DENNIS GRUBAUGH
    There are some things in life so indelibly etched in the memory they have a lasting impact. One of those was the manner in which I bought my first VCR.
    It was 1982 and I opened a special bank account to save the cash to avoid paying on time. I eventually purchased a $482 JVC model at a local department store and used the funds I’d amassed at First National Bank of Alton.
    Sad to say, the bank, the store I bought it at and even the machine itself are all gone. The technology, too, is also officially part of the past with the announcement in July that the last company making video cassette recorders was giving up the practice because of the changing times.
    While all this rambling may seem like an ode to yesteryear entertainment, it is not. The point is many people of my generation saved their way to buying cars, properties, vacations and college educations – without going deeply in the hole to do it. It made those purchases more significant. That practice was handed down to us by those who had lived through the Great Depression.
    Unfortunately, those “old ways” are getting away from us. The cost of so many things has grown to the point that simple savings accounts aren’t enough. People go vastly into debt to get the things they feel they have to have.
    And America’s leaders have proven no role model in their spending habits.
    Last month, in one of the most extraordinary summaries I’ve read in some time, it was reported that the U.S. national debt hit a record $19.38 trillion, up nearly $100 billion from just one day earlier.
    Estimates are the debt will be approximately $20 trillion by the time President Obama leaves office. Interest on the debt is now projected to be the fastest-growing area of federal spending. In 2015, the country spent 6 percent of the federal budget — $223 billion — on the interest alone. Left, unchecked the amount we pay others to hold our debt will someday eclipse the debt itself.
    These are, of course, numbers beyond the comprehension of average people — the very individuals who now buy far too many things on credit.
    But amid this pile of bills is an inescapable fact: The debt must be paid. Otherwise, the government’s failure to live within its means will someday lead to the exhaustion of every fund used to underwrite our standard of living — Social Security, Medicare, Obamacare and Medicaid among them. The debt will lead to uncontrollable inflation, meaning the costs of goods and services will climb to the point where even basic staples will be too costly to afford.
    Add to this toxic mess our aging population and rising health-care costs.
    We are left with three choices: pay more taxes for government, expect less in government services, or both.
    When a government can no longer afford to protect its people, anarchy is not far behind. Look to the chaos now under way in Venezuela if you think I’m kidding.
    I fear the greatest challenge of our next president — no matter the party — will not be national defense, jobs, infrastructure, trade or terrorism. There will be no money to pay for these concerns if we don’t get our heads around this debt.
    Dennis Grubaugh is editor and partner of the Illinois Business Journal. He can be reached at dgrubaugh@ibjonline.com or (618) 977-6865.