News Flash: We're Broke

The next president faces an unenviable task: namely, to fix the national fiscal position after eight years of Republican mismanagement. If they don't make fixing this their top priority, then the US could have an incredibly difficult time when they leave office in either four or eight years.

Let's start with an overview of the last six years. These figures are from the Bureau of Public Debt. They are the total amount of debt outstanding as of the end of the government's fiscal years.

09/30/2006 $8,506,973,899,215.23
09/30/2005 $7,932,709,661,723.50
09/30/2004 $7,379,052,696,330.32
09/30/2003 $6,783,231,062,743.62
09/30/2002 $6,228,235,965,597.16
09/30/2001 $5,807,463,412,200.06
09/30/2000 $5,674,178,209,886.86

Currently, the total national debt stands at $9,136,418,062,457.29

The Associated Press recently made this observation:

Like a ticking time bomb, the national debt is an explosion waiting to happen. It's expanding by about $1.4 billion a day -- or nearly $1 million a minute.

What's that mean to you?

It means almost $30,000 in debt for each man, woman, child and infant in the United States.

The most widely used calculation of national debt is the debt/GDP ratio.

Using the debt figures above and the third quarter total GDP figures from the Bureau of Economic Analysis we get the following debt/GDP rations.

2001: 57.29%
2002: 58.80%
2003: 61.18%
2004: 62.64%
2005: 63.16%
2006: 64.11%
2007: about 65% (the time frame of the numbers didn't match exactly).

Notice the ratio has consistently increased for the last six years.

Now, we're in the middle of the primary season, so everybody and their brother is making promises. Rudy wants to cut taxes further, Romney wants to make the latest round of tax cuts permanent, and Edwards has announced a spending plan to help the middle class. I'm sure combing through all the speeches and policy pronouncements from all the candidates would reveal they have all without exception made similar promises to people.

Here's the news flash: we can't afford a single new spending plan and we can't afford more tax cuts until we bring the national debt under control. Notice that over the last five years the U.S. has added over $500 billion dollars of net new debt per year each year. In short -- we're issuing debt like it's going out of style. That means the Bush's tax cuts were in fact tax deferments because they'll have to increase in order to pay for the spending for the last six years. It also means that further tax cuts should be off the table. It also means the further spending for new programs are off the table.

Simple put, the U.S. has to go into "let's save the federal government from bankruptcy" mode. If we don't then we're going to have worse trouble then you've ever seen.

Comments

[MadAppraiser]

The American economy is strong!!! No _ _ _ _! What are the financing terms of the $177,000,000 per day Iraqi war campaign loan? What is the number of years, or months to repay the loan, compounded at what discount rate [(%) daily, weekly, monthly, or yearly]? What is the annual debt service on the loan? Is there any prepayment penalty? What is the total cost of the loan? Caveat Emptor! Is there a reality leak in America concerning debt financing? America citizens have accepted the Iraqi war campaign debt without knowledge of the financing terms to repay the debt. Has America accepted a sub prime mortgage in the dark, based upon trust? I cannot answer any of these very expensive mortgage questions, can you?
After you read the abovementioned paragraph you realize that the sub prime mortgage gravy train was fairly easy to implement with trusting motivated buyers. Not to many American politicians or citizens other than the economists at the American Central Bank can answer any of these important questions! I guess all of us can laugh on the way to the poor house; it was a good ride while it lasted!

[LBA7895]

Amazing that more of the MSM doesn't pick up on this. Bush has managed to sweep his disasterous fiscal policies under the rug, so people don't realize the true financial cost of his misadventure in Iraq to theirs and their children's future.

I'd suggest any reasonable person Google "Starve The Beast" and prepare to be horrified. This bankrupting of the US with lower taxes and higher military spending was INTENTIONAL! Lunatics like Grover Norquist preach intentional bankrupting of the US so that the only way back to solvency is through evisceration of New Deal programs such as Medicare and Social Security.

Why would anyone listen to Norquist? Because George Bush told his professor at Harvard Business School that the New Deal was "Socialism"!

Republicans, in addition to being Neo-Facists, are also Social Darwinists. The party represents white middle and upper class people who KNOW things are bad and there isn't enough to go around, and are huddled under the "me first and to Hell with everybody else" tent of the Republican Party.

A sorry commentary on how far America has strayed from its populist roots to its current depths of depravity and greed! And to think that so called Christians make up the "base" of this depraved party!!!!!

[mikesterpa]

If you're the kind of person who believes that the buck stops with the guy signing the bills, then you can see the constantly updated attribution to three presidents who are responsible for almost 90% of our national debt at:

http://www.reaganbushdebt.org

[victorberry]

The run-up in national debt was planned by the Republicans as a way to dismantle Social Security and Medicare. If George W. Bush, Grover Norquist, Dick Armey, et al couldn't persuade the American people to ditch those programs voluntarily, then these sinister Republicans will bankrupt the country to achieve their end. How's that for good government?

[charlesrfd2003]

Flash! To find the money go where the money is. The poor don't have it so go to the very rich. Use the three letter T word, TAX.

Give the very rich an opportunity to be patriotic.

[TheWesternBreed]

And say, Bonddad: What G.W. Bush and his inner circle have done to our treasury, to our dollar, to Iraq, to constitutional law, and to so much else, precisely qualifies, I think, for a famous passage from the last page of THE GREAT GATSBY, describing the super-wealthy couple, Tom and Daisy Buchanan:

"I couldn't forgive him or like him but I saw that what he had done was, to him, entirely justified. It was all very careless and confused. They were careless people, Tom and Daisy--they smashed up things and creatures and then retreated back into their money or their vast carelessness or whatever it was that kept them together, and let other people clean up the mess they had made. . . ."

George W. Bush has spent a LIFETIME making messes for other people to clean up--he's done it now for the American government and people for years and years to come.

[TheWesternBreed]

It is for the kind of things that Bonddad has written that I call George W. Bush THE CREDIT-CARD TRILLIONAIRE, in homage to another sly, smirking little fraudster who used to populate Cable TV infomercials back in the 1980s. Only the number has gone up.

A documentary on the national debt and the government's runaway spending will soon be released with the title: I.O.U.S.A. I recommend that everyone who is interested go to see it.

[LightningJoe]

No theories of the Republican Mind are really palatable to me, but here's one that I can't shake off: that Bush and Co know exactly what they are doing to the country, and like it.

Consider: who owns the debt? Besides (and perhaps including) the Chinese, isn't the debt owned by an assortment of multinationally operated banks? Banks love debt, so long as it makes them interest. With the US in critical hock to them, they in effect own the country. ALL of our support for government will soon -- if it's not already -- be going to service that debt and keep bank shareholders and their heirs in yatchs and chalets in perpetuity.

Trust me, the owner class spends all day every day thinking about how to leverage one billion bucks into three billion bucks, and they haven't overlooked the advantages of owning the government outright. What do you think they discuss, over cigars and port?

The alternative hypothesis is that the owning class has the morals of a five-year-old.

Make that a "dual" hypothesis.

[PPatt]

This time around it will be kind of difficult to blame Clinton for this mess. Bush set forth from an enviable starting point.

I wonder if it is not a conscious strategy to use any pain incurred in straightening this mess out politically as the right reinvents themselves and attempts to re-emerge from the slime.

Clearly, they are hoping that we will forget who put us in this mess. From them we only hear great things about the stock market.

I do not see any conservatives willing to seriously engage themselves on issues that are clearly a matter of degree. They are confident that even this will work itself out just fine but when asked "if not 9 trillion then would 20 trillion in debt be too much?" they are unable to say and often suddenly silent.

Democrats should hound them endlessly with their fiscal irresponsibility as well as how the costs of fixing it will fall disproportionately on those at the bottom (if conservatives have their way, that is). Largely, dem responsibility for doing this seems to have been abdicated.

Don't forget. Ever.

[Spookcatcher]

When you do some good history of the 1928 Crash you see that the same bankers/fanilies are doing the same manioulatons and setup that they have used over and over. The world recession that lead to WW2 was very well documented as to its causes and the manipulations that were used. It is very apperaent what is being orchestrated. Americas are being used. World dominance Fascist Elitists and their Banker partnerships are at work here.

[YouThinkAndTalk]

The Republicans have gotten the excuse they always wanted to not fund government programs: we don't have money. Did you hear Bush's excuse for vetoing the bill? It has too much pork! And this comes from the King of Pork - like Iraq and private army.

Reagan was in favor of a balanced budget amendment, because it would have given him an excuse to not fund social programs - we don't have money because we have to balance the budget.

The Republican think that if government helps people, their penises will fall off. Steal and spend until the country has no more money, and the h**l with the people. That's the manly way.

[mrcontinental]

The President's actual budget for 2007 totals $2.8 trillion. Percentages in parentheses indicate percentage change compared to 2006. This budget request is broken down by the following expenditures:

$586.1 billion (+7.0%) - Social Security
$548.8 billion (+9.0%) - Defense
$394.5 billion (+12.4%) - Medicare
$367.0 billion (+2.0%) - Unemployment and welfare
$276.4 billion (+2.9%) - Medicaid and other health related
$243.7 billion (+13.4%) - Interest on debt
$89.9 billion (+1.3%) - Education and training
$76.9 billion (+8.1%) - Transportation
$72.6 billion (+5.8%) - Veterans' benefits
$43.5 billion (+9.2%) - Administration of justice
$33.1 billion (+5.7%) - Natural resources and environment
$32.5 billion (+15.4%) - Foreign affairs
$27.0 billion (+3.7%) - Agriculture
$26.8 billion (+28.7%) - Community and regional development
$25.0 billion (+4.0%) - Science and technology
$23.5 billion (+0.0%) - Energy
$20.1 billion (+11.4%) - General government

With a GDP of 14 trillion what is the problem? It's the rich not paying their fair share. They want to reap the most benefits from the system and pay the least into it. If those at the bottom were able to achieve a decent wage and standard of living Medicare, Medicaid, and Welfare could be practically eliminated but since the greedy assclowns at the top need billions and millions to survive that leaves nothing for those at the bottom.

And you expect this to continue indefinitely? It cannot. We've seen this in France, czarist Russia, and right here in 1776, and sooner or later the peasants revolt. To have so much wealth in this country and have people that are still impoverished is a travesty.

So all of you "every man for himself" wackos better invest in a good doomsday bunker because they'll be coming to collect sooner than you think.

[mrcontinental]

Receipts for fiscal year 2007 were $2,407 billion. FY2007 on-budget receipts were $1,798 billion. FY2007 off-budget receipts were $608 billion. Off-budget receipts include Social Security and Medicare payroll taxes, as well as the net profit or loss of the U.S. Postal Service.

$1,163 billion - Individual income tax
$869.6 billion - Social Security and other payroll taxes
$370.2 billion - Corporate income tax
$65.1 billion - Excise taxes
$26.0 billion - Customs duties
$26.0 billion - Estate and gift taxes
$47.2 billion - Other

Notice the Corporate income tax compared to the Individual income tax and tell me what's wrong with this picture. This is an outrage.

[Spookcatcher]

The 2970,000,000 Americans that are not rich will do very nicely with out the "help" we have been overseen with for the last 140 years. It is nearing time for a Democracy to be employed in Our Republic instead of the Elitists Supremist (Plantation) and Fascist World dominance/Manifest Destiny dichotomy of ideologies that has been turf fighting over control of Our Nation. China and Russia is hip to their business tactics and is getting smarter everyday about how to deal them/us out.

[mamacat]

The primary cost of Bush's war on Iraq is in the dead and damaged lives resulting from his insanity. But, in terms of money, it is just about impossible to comprehend how much money is being wasted each and every month. Some statistics:

Amount spent per month $10 billion
California's budget
deficit for next year,
due to decreased
revenues in a slowing
economy: $10 billion

Percent of the U.S.
population that lives
in California: 12% (almost 1 in 8)

So, if the 1/8 of the U.S. population that lives in California could get 1/12 of the money that will be thrown away in Iraq this year, the state budget could be balanced.
This is only one more example of the total mismanagement of fiscal policy that the Republicans are guilty of.
( And only 7 years ago, the U.S. had a balanced budget.)