“The hypocrisy is astounding. Every one of these Republicans complained about President Obama’s deficits and now they have put forward a trillion-dollar deficit.”

— Sen. Rand Paul

Members of both political parties criticized U.S. Sen. Rand Paul last week for his insistence that Senate Majority Leader Mitch McConnell grant him the right to amend a budget deal. Paul’s stand caused the government to briefly close.

The budget agreement that eventually was passed includes more than $300 billion in new spending over two years. The budget compromise significantly increased the caps on discretionary spending, provided nearly $90 billion in disaster relief and increased spending on health care in multiple ways.

Based on the score from the Congressional Budget Office, the budget deal increased next year’s deficits to roughly $1.2 trillion. Annual deficits would remain over $1 trillion indefinitely. Despite our current $20.5 trillion deficit, Congress recently approved a $1.5 trillion tax cut. Over the next decade, the CBO projects that gross debt will rise to roughly $31 trillion and to 110 percent of the gross domestic product by 2027.

The CBO’s projections show that the country’s net interest payments will more than triple under current law, climbing from $231 billion in 2014, or 1.3 percent of gross domestic product, to $799 billion in 2024, or 3 percent of GDP — the highest ratio since 1996

Why should we worry about our growing fiscal debt?

• A growing portion of savings would go toward purchasing government debt rather than making investments in productive capital goods such as factories and new infrastructure projects. Over time, that lack of investment will lead to lower growth in both GDP and personal income.

• To the extent that we raise taxes to curtail growing debt levels, savings will decline.

• An increase in interest costs will force reduced expenditures on other government programs.

• High debt load will limit our ability to cut taxes or increase spending should the economy need stimulus.

In 2010, economists Kenneth Rogoff and Carmen Reinhart reported that among the 20 developed countries studied, average annual GDP growth was 3 to 4 percent when debt was relatively moderate or low (i.e. under 60 percent of GDP) but dips to just 1.6 percent when debt was above 90 percent of GDP. Then-Federal Reserve Chairman Ben Bernanke stated in April 2010 that, “Neither experience nor economic theory clearly indicates the threshold at which government debt begins to endanger prosperity and economic stability. But given the significant costs and risks associated with a rapidly rising federal debt, our nation should soon put in place a credible plan for reducing deficits to sustainable levels over time.” Clearly, cutting taxes and increasing spending is a terrible combination.

Although citizens contribute to them, entitlement programs represent about 50 percent of our budget. Currently, the growth in spending on Social Security, Medicare, and Medicaid account for most of the projected increase in government spending. In order to restore fiscal balance, we need to find ways to reduce the deficits associated with these programs.

We also need to address our expenditures on defense, which represent about 16 percent of federal spending. Currently, the Pentagon does not even have to audit its books.

The legendary economist John Maynard Keynes would support Sen. Paul’s deficit fears. Keynes advocated deficit spending to overcome the lack of business investment during depressions. But he would argue strenuously for a surplus when the economy is strong, as it is now.

It is inexcusable to incur trillion dollar deficits for the foreseeable future.

While I abhor a government shutdown, I believe Sen. Paul’s concern about the size of our fiscal deficit is well founded.

Instead of borrowing to launch a worthwhile government program, we should pay for it. “This country is going to hell in a hand basket” with such profligate spending, Paul said.

“Your grandkids are being stuck with the bill! It is worth a debate whether we should borrow a million dollars a minute,” he said.

I agree.

Originally published in the Sarasota Herald-Tribune