The US government's economic house is on fire. The budget deficit in Washington exceeds the trillion-dollar mark and climbing. And America's overall national debt is now $22.5 trillion which is larger than the annual US gross domestic product (GDP).
With the debt that high, the US is shelling out unprecedented amounts of cash just to pay the interest alone. In fact, the net interest payments on the debt are estimated to total $393.5 billion this fiscal year.
Heritage Foundation economist Steve Moore tells CBN Founder Pat Robertson that action is required from both political parties.
"Federal spending is out of control. Democrats and Republicans are just as responsible for these deficits. The Democrats want to spend more money on social programs and the Republicans want to spend more money on the military so they spend more and more on each," he said.
"We are quickly approaching a situation where we have dug ourselves a debt hole which is going to have profoundly negative effects on the economy for probably decades going forward," says Maya MacGuineas, president of the Committee for a Responsible Federal Budget, according to CNBC.
Moore says the problem is not with revenue – federal tax money paid to the government hit a record high in 2018 and 2019.
"Never before in the history of this country have we had higher tax revenues than in 2018 and 2019. So that tells me it's not a revenue problem, it's not the tax cuts. It's that neither party wants to do anything to cut out of control government spending," he explained.
Moore is proposing the "Penny Plan" as a means of restoring fiscal sanity.
"For every dollar, we spend in Washington, next year that agency instead of spending that dollar, they spend 99 cents and cut one penny and the next year they spend one penny less. If you do that for five years, you've cut the deficit in half, just by cutting that penny a year," he added.
Locking in low-interest rates and issuing higher maturity bonds would help too, according to Moore.
"Issue 30- even 50-year bonds so that we're not susceptible to a giant increase in interest rates that would send our debt even more into the stratosphere. We could get a low-interest rate on those bonds and that would help over the next 20 or 30 years and save a couple trillion dollars."
Also, preventing other nations from damaging the US is critical in overcoming the current debt levels.
Moore explained, "We have to get this trade deal done with China. If we can get a trade deal done with China, the American economy is going to be like a taking a champagne bottle and shaking it up and taking the cork off it - we'll have a strong economy in 2020."