The “news” on cable TV seems skewed toward partisan bickering on topics our politicians refuse to address seriously. They criticize their opponents and quickly move on to the next allegation in the hope that some of the mud will stick. These unending arguments are fueled by the stylish, everchanging topics in the social justice bucket. There is a small vocal audience applauding these trivial dramas, but of necessity, most Americans are focused elsewhere — on their day job and caring for their family.

Those two priorities explain our interest in the real economy where we are employed and pay the bills. Now it’s time for the Federal government to pay its bills.

The economy is buoyant. Unemployment is low at 3.9%, GDP growth is impressive at 4.1%, and the tax cut of 2018 will continue to stimulate into 2019. Meanwhile, the federal government is spending a lot more than it takes in and struggles to pay interest on the national debt — a prescription for rapid growth in inflation.

Currently, we have an almost Goldilocks economy. The tax reforms of early 2018 will allow us to keep more of what we earn, and we will enjoy a windfall from repatriation of $2.5 trillion in corporate assets that have been stuck overseas due to inept tax policy. Those repatriated funds will fuel capital spending and jobs, thereby improving productivity and wages.

Progress in pruning economic regulations has quickened the pace of commerce, making goods and services cost less and laying a foundation for innovation and new jobs. Recent skirmishes with our trade partners can help correct the abuses and disadvantageous terms of trade we have endured for decades. For example, the EU imposes a 10% tariff on auto imports from the US, but the US imposes only a 2% tariff on auto imports from the EU. Unfair trade has chipped away at opportunities for US workers.

Some facets of the economy are not so rosy. Although unemployment sits at 3.9%, our future is peppered with anxieties over AI and robots that will displace human employees. We will need to address that long before the jobs are displaced. We are at risk from state-sponsored cybercrimes against our critical infrastructures (including our electoral system), and we face a few malicious nuclear wannabees and the chronically warring factions in the Middle East.

Despite our buoyant economy, we plan to pursue a decade of deficit spending. A healthy economy with low interest rates is an opportune time to repeal the easy money tactics of the great recession and indeed, the Federal Reserve is trying to reduce its oversized portfolio of bonds. Right-sizing the federal debt is at odds with chronic federal deficit spending. If we do not reduce the debt, federal interest payments will become an ever-widening sinkhole in all future budgets.

The federal government expects to run budget deficits of $981 billion in fiscal 2019, ramping up to $1.526 trillion in fiscal 2028. Our intentional deficit spending starts in a healthy economy with 2.2% GDP growth in the first quarter of 2018 and 4.1% in the second quarter of 2018. Real GDP growth is expected to be near 2.5% for 2019 and 2020.

The US Federal Reserve bought $4.5 trillion in bonds during the great recession in an effort to stimulate the economy with lower interest rates and increased liquidity. The Fed is now reducing its inventory of recession-era bonds by an extra $30 billion per quarter. This is reducing the indebtedness at about the same pace as a 30-year mortgage.

The increase in Treasury yields may dampen GDP growth. Currently, the US 10-year Treasury note yields 3%, and that rate is expected to be 3.5% by year end 2018. In 2019, the Fed is expected to impose two rate hikes, pushing the 10-year yield to 4% by mid-2019. The 4% rate will be imposed on newly issued debt (debt that is rolled over and brand-new debt). After that, Jamie Dimon of JP Morgan says the 10-year rate may hit 5%.

Treasury note yields could rise when debt-holders’ circumstances change. In 2013, China held $1.3 trillion in US debt. By May 2018, China had reduced its holding to $1.12 trillion. More recently China has had to accommodate the early days of a US trade war, a decline in Yuan value, and rising corporate bankruptcies. To limit its domestic slowdown, China announced it would refocus its credit to “support productive economic activity, especially small firms.” Recent riots in Beijing’s financial district were a result of constraints in peer-to-peer lending. China’s priorities signal the exit of a once-reliable buyer of US debt, putting upward pressure on US interest rates.

Other candidates for buying Treasury debt become skittish when the debt-to-GDP ratio nears 100%. Our ratio currently stands at 78%, but it is expected to rise to 96% by 2028. Lender reactions may elevate the interest rate needed to attract buyers for the Treasury’s borrowing. The Office of Management and Budget expects a cumulative increase in federal debt to be $12.4 trillion over the 2019 to 2028 period. The cumulative interest payments on that new debt are estimated at $2.52 trillion. Even in Washington DC, that is real money.

A genuine concern for consumers and taxpayers is that federal interest payments will crowd out funding for important government programs, including the continuation of 2018’s tax reforms. That would impair families’ ability to pay for items they need.

At the earliest opportunity, Congress needs to right-size the federal budget, by reining in spending. It is shameful to overspend in a buoyant economy – a time when debt should be paid down, not increased.