Sorting out the sorry story behind America’s $1.48 trillion dollar Deficit

Posted by By at 3 February, at 13 : 06 PM Print

A little over a week ago the Congressional Budget Office (the CBO) released its revised projected deficit for 2011-2012: $1.48 trillion.

The number is staggering. And in order to put it into context, I went back and looked at the history of our national debt and our yearly budget deficits. The things I found are startling, to say the least.

The first thing that jumped out at me was this overarching fact – one that is an indictment of every congress, President and political party over the last three generations: when was the last time we actually PAID DOWN the national debt? 1957.

The closest Clinton came was In 2000, when the debt only went up by $18 Billion. In fact, even for all of the talk of surpluses and balanced budgets, Clinton’s 8 years added $1.2 Trillion to the national debt – admittedly, chicken feed compared to his successors.

The Reagan area was perhaps the greatest period of debt expansion before this one, taking the national debt from around $1 trillion to $3 Trillion. At least GDP doubled during that period.

But back to our current deficit of $1.48 Trillion. To give you an idea how significant that number is, in order to balance the budget we have to cut by 40%.

Look at it this way: if we cut the ENTIRE defense budget – I mean shut it all down, turn off the lights and walk away – we STILL have at least a $650B deficit.

Want to get REALLY scared? If we shut down the entire defense budget, the remaining deficit is still higher that the worst year under the Bush administration ($638 Billion). The highest three year period in 43’s tenure? An increase of $1.71 trillion.

Consider the Bush high water mark/low point of $638B – even if the current President reaches his goal of cutting the deficit in half by 2014, it will still mean an annual deficit in excess of the worst year under Bush – a number that Candidate Obama decried as “the soaring Bush deficits.” Hey, what President doesn’t want to fly higher than his predecessor?

Consider this: when my first-born came into the world, he owed $37,000 dollars (welcome to the world Son!). In the last 7 years, that number has increased by almost 40%. You want to make an argument for Amnesty? Adding 20 million new members will drop our dues by about $3000 a piece.

What is the point of the exercise? The reason is straightforward: we need to face the reality of our economics. The rate we are spending money is simply untenable. It MUST stop.

We now owe more than 6 times our annual revenue. Consider it this way – if you make $40K a year, you would owe $240K – on your Chinese credit card.

This cannot be sustained, it simply cannot. The amount of debt we are amassing will lead to one of two directions – a devalued currency or a world war. The trend has to stop now.

There are tough choices ahead – cuts that have to be made, realities that have to be faced. I just hope, somewhere, out there in that drained swamp we call our Nation’s Capital there exists the will and the vision to make them.

Frankly, I am not holding my breath.

(Want to read more of what’s in that CBO report, then just click on Rock The Capital.)

This post was written by:
- who has written 77 posts for Rock The Capital
Scott Paterno is an accomplished policy analyst and political consultant based in Hershey, PA. Mr. Paterno, never one to sit still, has practiced law, run for a house seat, and worked as lobbyist in Harrisburg and Washington. Paterno is Vice Chairman of the Sustainable Energy Fund and is currently pursuing a master’s degree in Political Science. He is happily married with three children. - Email scottp

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