Posted 2/17/10 (Wed)
By Neal A. Shipman
Is America’s debt finally getting the national media attention that it deserves? One might think so if a person glances at the headlines of any of the major daily newspapers or news magazines. With headlines screaming, “U.S. debt will continue to grow even with recovery,” “How to tame the deficit,” “A national debt of mind-boggling proportions” one would think that President Obama and the U.S. Congress would be doing some serious work on getting our country’s financial house in order.
The good news is that the Obama administration and Congress are working on a new budget and more new programs designed to improve the nation’s economy. The bad news is that all of these new programs are going to run up this nation’s national debt to a higher limit than this country has ever experienced in its 200+ years of existence.
According to a recent Associated Press story, our federal government has made too many promises to so many expanding “mandatory” programs. And if the government keeps those commitments, without major changes in taxing and spending, it will lead to deficits that cannot be sustained.
Over the years, Congress has been very generous with the taxpayers’ money. It has created program after program, created thousands of federal jobs, built military bases around the world, almost single-handedly funded wars and conflicts around the globe, and poured billions of dollars of aid and assistance to foreign countries. And it has done all of this while still passing along billions of dollars of aid and assistance to the 50 states.
While it may be nice to be able to help others financially, it is always nice to have real money to give away. And unfortunately, for the past several decades, that has not been the case for the U.S. government. So instead of choosing not to dole out more federal handouts or increasing federal programs all of which increased the federal budget, Congress chose to exercise the easy option. Which was to simply print more money. And thus run up the national debt.
Congress was obviously hoping, and praying, for some kind of miraculous deliverance from the terribly slippery slope of national indebtedness that it created. Perhaps it was hoping for a windfall in income taxes on the heals of some kind of national economic expansion that never came to be. Or maybe Congress was were praying that someone else would finally figure out a way to create a new tax that Americans would embrace that would put a stop to the runaway debt.
Well, neither of these things have happened so far in most of our lifetimes. And now the U.S. is faced with a situation where, according to projections by government economists, Social Security, Medicare and other benefits, plus the interest payments on a national debt that now exceeds $12.3 trillion, will gobble up 80 percent of all federal revenues by 2020.
That means that unless there is a fundamental change in either the way that our government takes in money or spends money, within 10 years, only 20 percent of the government’s revenues will be left to pay for everything else that the government spends money on, including military, health and services, education and everything else that Americans and the rest of the world have come to expect from the United States.
These are some very sobering figures. No one knows for sure when America’s day of reckoning regarding its debt is going to come. But that day is coming faster than anyone wants to admit.
President Obama and Congress can talk all they want about how important it is to keep funneling billions of dollars into economic recovery programs that so far have done very little, if anything, to jump-start the economy. But, maybe it’s time that instead of talking about adding new programs, they focus their attention on resolving the nation’s debt.