We need to fix our nation’s balance sheet for the coming decades of increasing global competition. According to USDA economic statistics, over the next 20 years U.S. share of world GDP will shrink from 26 percent to 22 percent. Other developed regions will decline from 40 percent to 29 percent. And developing countries will grow from 34 percent to 49 percent. In 20 years developing countries will represent half of world GDP. Countries like China are becoming a global competitive force—and we will need a strong balance sheet to compete.
With net public debt around 75 percent of GDP today, our debt will grow to about 100 percent in the next decade as the impact of baby boomer generation retirement is felt. It is now the highest it has been at any time in our country’s history except for the end of World War II. We should use the current two-month window resulting from the recent debt deal to address our real issue and strike a deal that reforms both social programs and tax policy. Our political indolence and preference for yelling across the room rather than engaging hurts us every day.
Uncertainty kills growth. As a business leader, I know that the sooner Congress and the administration reach a meaningful long term deal, the sooner the private sector will have the confidence to invest in hiring and expansion. That’s the surest and quickest path to a global economy that grows and provides jobs like we all want it to.
As the story goes, at conclusion of the Constitutional Convention in 1787, a spectator from the street shouted to Benjamin Franklin, “Dr. Franklin, what have you given us?” His response: “A Republic if you can keep it!”
Our Founding Fathers established the heritage of a sound financial foundation. Every generation since then has lived and spent responsibly to ensure the next generation thrived. We need to tell our politicians to not squander our heritage.