National Debt

$2.2 trillion debt will bring ‘dry statistics’ painfully home

Click to see original imageSome frightening figures on our national debt were revealed in a joinnt report by the Treasury Departmu-nt and the Office of Management and Budget for the fiscal year that ended Sept. 30. The figures, as reported by the press. are not just “dry slatistics.” They affect every American plus children and grandchildren yet unborn. The federal government closed out fiscal 1%6 with a total accumulated debt of $2.2 trillion following a record $220.7 billion deficit for the year. If you’re not accustomed to such astronomical figures, it may help to keep in mind that a trillion is a thousand billions and a billion is a thousand millions. The $2.2 trillion federal ddit avaages more than $9.000 per capita. figuring current population at roughly 241 million. Compare this with Ltne $16.2 billion 1$3l2 per capital national debt in 1930 at the onset of the Great Depression and $271 billion 11,91I per capital in 1946 at the close of World War ll. Wise George Washington, our first president. advised in his Farewell Address that his countrymen “cherish public credit use it sparingly as possible avoiding likewise the acctmnulatnon of debt in time of peace to discharge the debts which unavoidable wars may have occasioned. not generously throwing upon prsterity the burden which we ourselves ought to bear.” But Congress and tl-ne President, under pressure by urgent needs of the day as well as from special interests and a demanding public. have bypassed that sounl counsel. By far the biggest share of the debt has been amassed rn times of peace and relative prosperity, Makes you wonder how we’d fare economically in another sustained depression or i.n the event of an expensive World War lll. Here’s another shocking figure from the fnscal ‘Bti report: it cost taxpayers a whopping $187.1 billion for interest payments to service the debt. That’s nearly 19 percent of the artire budget outlay of $89.8 billion – a sad story for a wellresourced nation like the United States. l must say also its deeply disappointing to review the federal budget record and note that our elected officials have brought expenditures in line with revenues only eight times since 1980. Only eight budget surpluses in 56 years! Four of the balanced budgets came during Harry Truman’s tenure in the White House; three were durnng the Dwight Eisenhower years and the last one was in 1969, Richard Nixon’s first year as President. Due to Une red-ink spending pattern, interest by itself is a substantial barrier to a balanced budget. Note by the following how the cost of servicing the debt has ballooned into the huge budget item it is today; in 1962 the government paid $8.3 billion in interest. The figure had climbed to nearly $19 billion in 1970 and reached $74.8 billion in 19811 on the way to the $187.1 billion level at the close of fiscal ’86. By far the biggest upsurge in the debt has come in the past 11 years. The country was m0 ye-nrs 11775 to 1.975) accumulating an obligation of over a half-trillion dollars. Just six years later – by the end of 1981 – it had reached the trilion-dollar mark talbeit today’s dollars, inflation-devalunal thrgugh the years, ”aren’t what they used to e.”l When Ronald Reagan entered the White House in 1981 he had high hopes of balancing the budget by 1983 or 1984. lndccd he was quoted as saying he intended to be “the first Praident in history to ask Congress for a reduction in the debt ceiling.” Unfortunately things didn’t work out that way. Instead, the debt has more than doubled in the past fnve years! The record 1986 deficit of $220.7 billion came despite unactmernt of tl-ne GrammRudman deficit reduction act and $12 billion in spending cuts made under it. That law calls for a balanced budget by 1991, A setback came last summer when a provision. triggering automatic spending cuts if Congress fails to meet increasinglystringent deficit targets, was invalidated by the Sn;-reme Court. My second article will sketch some highlights nn the history of t.he national ddnt 1includmg one period when the governmmt was debt-free) and unsuccessful modern efforts to reverse the deficit spending pattern.