Public Debt

As of today, the total national debt is $9,405,738,960,230.52 (that’s about $9.4 trillion for those not used to 13-digit numbers). I know this because the debt is published, to the penny, every day at http://www.treasurydirect.gov/NP/BPDLogin?application=np.  Thanks to that site, I also know that the national debt on January 20, 2001 was $5,727,776,738,304.64.  I know, therefore, that in a little over seven years our federal government has managed to spend nearly $4 trillion more than it brought in in tax revenue.  That is an incredible fact, known to far too few Americans.

I also know that the federal government paid about $430 billion in interest on the national debt in 2007.   So far in fiscal year 2008, the amount spent to pay interest on the debt is approaching $250 billion.  In fact, nearly 10% of the tax revenue collected by the federal government goes just to pay the interest on the debt.  Twenty-five percent of the federal debt is owed to foreign countries or nationals.  So, 25% of the interest payments our government makes on the money it has borrowed are to persons or governments outside the U.S.  These almost incredible facts are unknown to most Americans.

The federal debt is so enormous that it is hard to conceive of any possibilty that it could ever be repaid.  The sad truth is that its hard to imagine that the future holds in store anything other than greater and greater tax burdens, to pay ever-increasing interest on the ever-increasing debt.

But, wait!  There’s more…

Unfortunately, the public debt on the books is merely the tip of the proverbial iceberg.  The government does not accrue the unfunded liabilities associated with future entitlement commitments.  (Any private accountant who kept books this way would lose his license, and probably go to jail.)  When those liabilities are taken into account, the frightening magnitude of the crisis facing our country is revealed.

The unfunded (meaning, the money ain’t there) liability for Medicare, Social Security and federal retirement programs such as military pensions, is approximately $99 Trillion.  That is not a typo.  These obligations, to which our elected representatives have agreed on our behalf, will be simply impossible to meet absent nearly unimaginable levels of taxation, or a systematic debasement of the currency.

David Walker has served as Comptroller General of the United States for the past ten years.  During his tenure, he has tired desperately to draw the public’s attention to this fiscal crisis.  Politicians, of course, have avoided him like the plague.  The truth he speaks simply interfered with their election promises.  Finally, in frustration, Mr. Walker resigned on March 12 of this year, to devote his time fully to trying to educate Americans on this impending meltdown.

Here is a video (in two parts) he made while still Comptroller General, which should be required viewing for every American:    http://www.youtube.com/watch?v=KIgrxpp97OQ&feature=related; http://www.youtube.com/watch?v=DXr_Ga_n0pY&feature=related

I cannot urge y’all enough to watch the Walker videos.

Now get this–those videos are a couple of years old.  The situation is actually considerably worse now than it was then.

More tomorrow….

Grace and Peace

 

5 comments on “Public Debt

  1. Will says:

    That’s plain awful. A horrible tragedy and it makes it hard for our country to remain great. I cannot believe we have sunk so far.

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  2. Tim says:

    Americans are blindly being led into a hyperinflationary depression and everyone paying attention knows it. I have considered many possibilities for this and the only thing that truly makes sense is that the rumors of the IPP are true. That we are laying the groundwork for a North American Union. One phase of that is to debase our currency to a comparable level of the peso. Amassing massive debt combined with the inflationary response is the fastest way to this end and that is exactly what has been happening since Bush took office.

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  3. Joeywahoo says:

    Tim:

    I seriously doubt there is any conspiracy behind this. Its far more likely to be plain old malfeasance. Thanks for the link to the article. Scary stuff.

    Give anyone who can’t control their spending habits a credit card with an unlimited maximum, and they’ll run it sky high. Thats exactly what the federal government has done. Imagine that same spendaholic had a machine to print money. Surely once the monthly minimums were no longer affordable, he’d just print up the money to make the payments. Its the same with the federal government.

    I think its highly likely that we’ll have revaluation of the currency someday, which will effectively “adjust” the debt (by partial repudiation).

    I doubt Americans will ever accept an “Amero”. Heck, they couldn’t even get us to convert to metric, or use dollar coins. We’re just too stubborn. But the USD as the currency for the hemisphere? I have no trouble believing that.

    I think it was Warren Buffett who said, “When the tide goes out, we’ll find out who’s been swimming naked.” I’m afraid we’ll know soon.

    Bill

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  4. Tim says:

    I agree, but it is so much more fun to blame some old cronies in a backwoods mansion than the more mundane and obvious shortcomings of government officials(and by proxy ourselves!). I do see some form of repudiation in the future as well and I’d support it if the mechanisms were put in place to insure that we can never be taken down this road again. Murray Rothbard(1926-1995) wrote this piece: http://mises.org/article.aspx?Id=1423 It was in 1992, so the numbers are worse now for sure(debt was $3.5 trillion then I think).

    After discussing a complete repudiation scheme, he offers this:

    “But if this scheme is considered too Draconian, why not treat the federal government as any private bankrupt is treated (forgetting about Chapter 11)? The government is an organization, so why not liquidate the assets of that organization and pay the creditors (the government bondholders) a pro-rata share of those assets? This solution would cost the taxpayer nothing, and, once again, relieve him of $200 billion in annual interest payments. The United States government should be forced to disgorge its assets, sell them at auction, and then pay off the creditors accordingly. What government assets? There are a great deal of assets, from TVA to the national lands to various structures such as the Post Office. The massive CIA headquarters at Langley, Virginia, should raise a pretty penny for enough condominium housing for the entire work force inside the Beltway. Perhaps we could eject the United Nations from the United States, reclaim the land and buildings, and sell them for luxury housing for the East Side gliterati. Another serendipity out of this process would be a massive privatization of the socialized land of the Western United States and of the rest of America as well. This combination of repudiation and privatization would go a long way to reducing the tax burden, establishing fiscal soundness, and desocializing the United States. ”

    Sounds great to me, of course after passing a BBA.

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  5. Joeywahoo says:

    I should have known you were an Austrian! Turning the CIA complex into condos for NOVA yuppies sounds like a great idea to me…

    Like

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