How much do any of us really know about our nation’s debt? We hear news stories about it constantly. But do we as everyday Americans really understand our debt situation? Should we be concerned, worried, terrified?
In order to cut through the sound bites and the sky is falling predictions, I googled the issue seeking to get a basic understanding of the topic. Of the many websites / stories on the topic, one in particular provided me the basics of the issues. Did you know?
• The current US debt is over $14 trillion dollars of which two-thirds is owed to people, businesses, and foreign governments who have purchased treasury bills, notes, and bonds.
• The remaining one-third is owed to the government and held as Government Account Securities – funds we have borrowed from Social Security and other trusts funds.
• The U.S. debt is the largest in the world. From 2000-2007, our debt grew by 50% ballooning from $6 to $9 trillion. Add an additional $700 billion bailout program in late 2008, and we are now over $10 trillion.
• The US debt is currently about 95% of GDP up from only 51% in 1988.
• The interest owed on our debt was $414 billion in FY 2010. The interest is the 5th largest federal budget line item following defense and security ($890 billion), Social Security ($730 billion), and Medicare ($490 Billion).
The interesting facts could go on forever. But hopefully these few will suffice in framing the issue in order to discuss its impact.
Again, as we reflect on these facts, are we concerned, worried, or terrified? Or do we care? Of course we care. But if the majority of Americans really were concerned, how did we get here? How did our elected officials “spend” us into this situation? How did we become so distracted or disillusioned into thinking that spending more than we have is ok?
Remember the budget surpluses that VP Gore and Gov. Bush discussed in the 2000 presidential campaign. Seriously … just 10 years ago, the two men vying to become our nation’s 43rd President, debated what they would do with the surplus that occurred from a few good years of the federal government spending less than it took in. Believe it or not, they both agreed that the “surplus” should be used to pay down the debt, shore up Social Security, and to give back the rest as credits or tax cuts. Remember that when these debates were occurring, the total US debt was around $5.6 trillion.
Gov. Bush eventually became President. He pushed hard for tax cuts and got them. The nation entered into a recession, terrorists attacked us in September of 2001, and almost immediately we became entangled in two wars. Spending soared to unprecedented levels and by the time President Obama was sworn in our debt is a whopping $10 trillion. Fast forward two years, and our debt is now over $14 trillion.
Back in 2000, VP Gore and Gov. Bush also agreed that by the time either was sworn in as President, the accumulated “surplus” would equal approximately $4.6 trillion. As Larry the Cable would say, “Can you believe that”? The debt was approximately $5.6 trillion and the surplus from the most recent annual budgets was approximately $4.6 trillion.
Where would we be today if President Bush would have used the entire “surplus” to pay down our nation’s debt? Imagine starting your presidency off on the right foot and reducing the debt of the country you serve from $5 trillion to $1 trillion. For those who want to play devil’s advocate, the tragedy of 9/11 and the recession, and the wars of the Bush years would have still required deficit spending. You are correct in assuming that some of the spending of the Bush Presidency would have been necessary. But in the end, our national debt would be about $5 trillion less today if he had used the $4.6 trillion in surplus to pay down our debt in 2000. In reality, he and Congress spent the $4.6 trillion and borrowed another $4 trillion.
Our national debt dilemma is no one person or President’s fault (Bush $8 trillion / Obama $4 trillion). Many are to blame for what ails us. But if history has taught us anything, it is that tough times are reoccurring. We will have national disasters, wars / military conflicts, recessions, etc. It is time we do the prudent and get our financial house in order, in order to restore America’s strength.
It is incumbent that both parties and the President roll up their sleeves and get federal spending under control both in the short-term and long-term.