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October 26th 2010 print

Campaign countdown

Mark Steyn: “So we’re not facing ‘decline’. We’re already in it. What comes next is the ‘fall’ – sudden, devastating, off the cliff. That’s why this election is consequential.”

Mark Steyn on the November US elections:

So we’re not facing “decline”. We’re already in it. What comes next is the “fall” – sudden, devastating, off the cliff. That’s why this election is consequential – because the Obama-Pelosi-Reid spending spree made what was vague and distant explicit and immediate. A lot of the debate about America’s date with destiny has an airy-fairy beyond-the-blue-horizon mid-century quality, all to do with long-term trends and other remote indicators. In reality, we’ll be lucky to make it through the short-term in sufficient shape to get finished off by the long-term. According to CBO projections, by 2055 interest payments on the debt will exceed federal revenues. But I don’t think we’ll need to worry about a “Government of the United States” at that stage. By 1788, Louis XVI’s government in France was spending a mere 60 per cent of revenues on debt service, and we all know how that worked out for the House of Bourbon the following year.

In other words, forget about mid-century. Within a decade, the United States will be spending more of the federal budget on its interest payments than on its military. You read that right: more on debt service than on the armed services. According to the CBO’s long-term budget outlook, by 2020 the government will be paying between 15 and 20 per cent of its revenues in debt interest. Whereas defense spending will be down to between 14 and 16 per cent. And even those figures are premised on an optimistic assumption of resumed economic growth but continued low interest rates.

So hold that thought: within a decade, the United States will be spending more on interest payments on the federal debt than it does on the military – and that’s not because the Pentagon is such a great bargain. In 2009, the United States accounted for over 43 per cent of the world’s military expenditures. So, within a few years, America will be spending more on debt interest than China, Britain, France, Russia, Japan, Germany, Saudi Arabia, India, Italy, South Korea, Brazil, Canada, Australia, Spain, Turkey and Israel spend on their militaries combined. The superpower will have evolved from a nation of aircraft carriers to a nation of debt carriers.

Read Mark Steyn’s “Campaign Countdown: it starts with the money” at SteynOnline.com