18 March 2013 –
Despite what Speaker Boehner and President Obama have said to the contrary in the last several days, we are indeed in a fiscal crisis right now, today, at this very minute. Why? Because Congress, particularly the Senate, has yet to fulfill its constitutional duty and pass a real budget this year. In fact, the Senate has failed to do so for the last four years. In simple words, the United States has not had any restraints on its spending since President Obama was inaugurated in 2009. If you tried to do this in a business, you would be bankrupt in four years. Indeed, we are almost bankrupt now.
Is this a new phenomenon, this profligate spending? No, it is not. But, President Obama has excelled at it far beyond his predecessor—and President Bush’s administration was no piker when it came to spending money it didn’t have. Some would say that it was because of two ill-advised wars that Bush’s deficit spending soared. That is part of it, but the wars also have been a part of President Obama’s reason for his record deficits as well. Regardless of our ill-conceived and executed military adventurism in the last twelve years, the main reason for the ballooning deficits is the constant increase in entitlement spending. Cutting military spending will do little to stop the trends in entitlement spending.
How serious is the current federal debt? How much do we really owe? What is the trend? The debt on 30 September 2012 stood at $16,066,241,707,385. That is 16 trillion and change. By the way, the change, $66.2 billion, is more than the entire debt was in 1941 at the start of World War Two. The federal debt has grown every year since 1950 except for a slight dip in 1951. That is sixty one out of the last sixty-two years we have spent more than we have collected in taxes. The last three generations of Americans have encouraged their government officials to be fiscally irresponsible to a point that there are few people alive today who were working when we last executed a balanced budget. It seems that most people alive today have never learned how to spend less than they take in. Now, we are in the critical situation where the $16.1 trillion debt is more than the entire country makes in a year. This is the first time this has ever happened in the history of the United States. No wonder the country’s credit rating was lowered in the last two years. We are Greece on steroids.
The trend in our profligacy warrants special mention. The total debt has spiraled out of control in the last few years, but the trend has been building for some time. In 1946, the federal deficit stood at $269.4 billion. Fifteen years later, in 1960, the deficit was at $286.3 billion. That was an increase of 6.3%, only about .4% each year. Then through the sixties and seventies, with the Great Society programs becoming a normal part of American life, the deficit increased 216% in just twenty years, over 10% a year, to $907.7 billion dollars. From 1980 to 1992, a Republican Golden Age as described by some, but with Congress still controlled by Democrats, the debt increased to $4.06 trillion. Trillion dollars! That is over $4,00,000,000,000. A four followed by twelve zeros. That was an increase of 347% in twelve years. From 1992 to 2000, under a Democratic President and a Republican Congress in the last few years of the administration, the debt grew to $5.674 trillion dollars, a much smaller increase of 46% and $1.6 trillion. The Compassionate Conservatism of President Bush was, in my opinion, just another name for government spending on things that corrupt America. By 2008, the public debt exceeded $10 trillion dollars, a 77% increase during the Bush administration. As profligate as these earlier administrations and Congresses have been, the current government has shown everybody how to really spend other peoples’ money. In just four years, government has spent another $6 trillion dollars it doesn't have. That is $6,000,000,000,000 more than the government collected in taxes, including income taxes that were collected from only about half of Americans. That is an increase of 60%, or 15% a year added to an already enormous debt. How serious would that be if it were an American family who made $50,000 a year, spent $58,000 a year, and already had $51,000 in credit card debt? What would a court-ordered financial counselor tell that family to do to prevent bankruptcy? I am sure that the counselor would cut up the family’s credit cards and tell the family to learn how to pay as they go.
Federal Debt Increases Since 1950
1950 – 1960 – 6% increase; .4% a year
1960 – 1980 – 216% increase; 11% a year
1980 – 1992 – 347% increase; 29% a year
1992 – 2000 – 46% increase; 6% a year
2000 – 2008 – 77% increase; 10% a year
2008 – 2012 – 60% increase; 15% a year
This is not a revenue problem. In 2011, the U.S. government collected at least $2.8 trillion in income and other taxes, more than ever before in history. The problem is spending. For all our lives, we have spent, we are spending, and there is no sign that either the Senate or the President wants to do anything but spend beyond our means. That is the fact we must come to grips with.
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