U.S. Debt Exceeds $13.4 Trillion This Week
September 1, 2010
The U.S. national debt will exceed $13.4 trillion shortly, according to Michael D. Tanner of the Cato Institute. To put that in perspective:
- If you earned $1 every second, it would take you 425,000 years to earn enough money to pay off that debt.
- According to the Congressional Budget Office (CBO), the United States will run up more than $1 trillion in debt next year as well, and for years to come.
As the full force of entitlement programs kicks in, the federal government will consume more than 40 percent of gross domestic product (GDP) by the middle of the century. That doesn't even begin to count state and local government spending. And with entitlement programs like Social Security and Medicare facing more than $100 trillion in future unfunded liabilities, we may look back on this level of debt as representing the "good old days."
Why is the debt mounting so fast?
- Federal taxes have traditionally run at around 18 percent of GDP.
- Currently, they are down somewhat, around 15 percent of GDP, mostly as a result of the recession.
But more importantly, federal spending has grown. Traditionally, federal spending has run around 21 percent of GDP. But George W. Bush and (even more dramatically) Barack Obama have now driven federal spending to more than 25 percent of GDP.
Cutting spending is never easy politically. In an election season like this one, being honest about spending is liable to get you labeled as an "extremist." But it is time for someone to step up and show the courage to tell the American people that Santa Claus isn't coming to town.
Source: Michael D. Tanner, "The Deficit Is a Symptom, Spending Is the Disease," National Review Online, August 25, 2010.
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