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'The Titanic Is Headed to the Iceberg': Skyrocketing Debt Has US at a Crossroads

'The Titanic Is Headed to the Iceberg': Skyrocketing Debt Has US at a Crossroads Read Transcript

- [Ben] --rise, thanks toCongress passing legislation

to suspend the debt ceiling.

As a result, in March, thedebt hit 21 trillion dollars.

- I fear that it might takeanother financial crisis

before Congress acts.

But then, it might be too late.

- [Ben] The HeritageFoundation's Stephen Moore

says D.C. is in amidst of abipartisan spending spree.

- We've seen a racketing of our debt,

especially in the last 10 years,

where Obama took the debtfrom 10 to 20 trillion.

- If the debt paymentscontinue to rise and rise,

do you see them gettingbigger than major programs

like the military?

- Well, here's the thing.

I mean, the most importantthing in controlling the debt

is to grow the economy.

That's the advice thatI gave to Donald Trump.

- [Ben] Trump's Chief Economic Advisor,

Larry Kudlow, agrees.

- What drastic actionsare you recommending

to stop the rising debt thatdoesn't damage the economy

or cause interest rates to spike?

- I don't think, by the way, there's any

particular relationship betweenthe debt and interest rates.

But, I want to reduce thedebt burden on the economy.

So, growth, you've got debt, numerator,

GDP, denominator.

Get that GDP up.

- [Ben] The gross domesticproduct is the value

of U.S. goods and services used to examine

the nation's overall economic health.

Kudlow recommends growingthe economy to the max,

so that the governmentbrings in more money

to make the interest payments on the debt.

- The trick is, get thatratio as low as possible.

And I don't we're in adanger zone right now,

but I'd like to see it come down.

- [Ben] And rising interestrates can be very expensive

for Washington and tax payers.

Then government paid outmore than 450 billion dollars

in interest payments on the national debt

in each of the last two years.

If rates rise just a half a point or so,

that could add another 70 to100 billion dollars or more

to those payments every year.

And Moore points out, thatwill add up over time.

- If the interest rate goesup a quarter of a point,

or let's say half apoint, what kind of impact

will that have on paying off the debt?

- So, in every onepercentage point increase

in the interest rate,increases the debt payments

over a decade by a trillion dollars.

So we're talking aboutreally large numbers.

- [Ben] Moore recommendsone way to slow down

the sky rocketing debt,is to reform programs

like social security and Medicare.

Plus, delaying the retirement age,

because people are living longer.

- We've known for 30 years that

the Titanic has headed to the iceberg.

And social security and Medicare,

we know the American peopleare aging, I'm a baby boomer,

there's 80 million of us.

In the next 10 or 15 years,we're gonna stop paying taxes,

and we're gonna start collecting

all these government benefits.

It's not gonna work.

- Bottom line, this is a long run problem

that neither party is addressing.

In the meantime, the government won't face

any limit on borrowing until March.

Ben Kennedy, CBN News, Washington.


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