I have been writing a lot lately about the need for a Balanced Budget Amendment to the U.S. Constitution. Our public debt (on which we pay interest) is now over $13 trillion and amounts to 74% of GDP. And this percentage, the highest since the end of WWII, is projected by the Congressional Budget Office to keep growing indefinitely. Eventually this will lead to another financial crisis, likely much worse than the one we’re still getting over with.
Here is a vivid example of why it’s so hard for Congress to stop spending more each year than is collected in tax revenue. Vice President Joe Biden wants to launch a cancer “moonshot”, in honor of his late son Beau who died from brain cancer in May 2015, by “increasing resources – both public and private – to fight cancer.” This is an apparently attractive but actually poor idea for the following reasons:
- The annual budget for the National Institutes of Health, which fund medical research, has already been increased by $2 billion for the current 2016 budget year.
- Major advances in immunotherapy are enabling oncologists to target the surface of cancerous cells instead of using chemotherapy that affects the whole body. But these targeted therapies routinely cost over $100,000 a year per patient.
- Mr. Biden’s medical advisors are recommending that Medicare start paying for gene sequencing (http://www.nytimes.com/2016/01/14/health/moonshot-to-cure-cancer-to-be-led-by-biden-relies-on-outmoded-view-of-disease.html) to help with these new immunotherapies.
Everyone would like to speed up the war on cancer. But we’re already spending billions of dollars a year on it and cancer researchers are making steady advances. In other words, we should leave well enough alone on the cancer front and focus on a much more fundamental problem which is already severe.
I am referring, of course, to our excessively large and rapidly growing national debt. Right now interest rates are at historic lows and so our debt is almost “free money”. But this is already starting to change and soon interest payments on the debt will be eating us alive. We’re already in a deep hole but at least we can stop making it any deeper than it already is.
This is exactly what a Balanced Budget Amendment will accomplish.