So in general terms the increase in debt looks like this:
First 164 years of operation (1776 to 1940): about 0.5 Trillion
Next 60 years of operation (1940 to 2000): about 4.6 Trillion
Following 12 years of operation (2000 to 2012): about 14.4 Trillion
I, myself, didn’t even realize how much we have accumulated in such a short amount of time. I sort of figured we had always had several trillion dollars of debt, so hitting 15 Trillion was not earth-shattering. At an average rate of 780 billion per year, in another 10 years we’ll be at about $23 Trillion in debt, and it might not stop there.
What will it take to convince politicians to balance the budget? Personally I think it should be a mandate that the budget be balanced each year. Our families all function on balanced budgets, and when we don’t for even just a few years we end up filing for bankruptcy or needing to reconsolidate our debt, either way our credit is ruined. The nation’s credit rating has already been downgraded for the first time ever, yet the yearly budget deficits go on. If we don’t tend to the situation it will be left to our children to pay extraordinarily high taxes just to pay the interest the $X Trillion accumulates each year. It is a tough matter because we like our politicians to bring money to our state and we figure that it is better that our state receives it than some other state and the money is going to go somewhere, right? Somehow we need to work together, citizens of all states, and agree that the money is not ours at all. It is borrowed and eventually the interest rate will be much more than it is today when the lenders realized we are over-leveraged.
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4 comments:
Bill,
Very shocking information! As a mother of 4 young kids, that's NOT what I wanted to hear the day before starting a new year, but in a way glad to get some of this information.
"Somehow we need to work together, citizens of all states, and agree that the money is not ours at all." That's the statement that caught my eye. Every one needs to take responsibility! Vote. Live within your means. Save money. Plan ahead. Get involved. Thanks for the reminder, Bill.
Hi Dorien,
Sorry to be the bearer of bad news on the eve of the new year. I just couldn't believe it when I found out and I had to tell others. The news makes a big deal out of the debt amount as of today, but they don't tell you the rest of the story. May the new year help congress to find their way to a balanced budget! Thanks for the comment and I love your blog,
Bill
Bill,
I do think it is interesting - the figures you site above. But lets not forget that the value and mileage of the dollar has evolved over time, and so some of it is relative.
While I agree that we should not be spending frivolously, and our US Federal politicians - much of the time - do not have any understanding of how the people really live, I am also not with the belief that it is *always* 100% of the time in an entity's best interest to completely balance a budget.
Example: When you've had a run of several years when there has been considerable surplus, and a major employer halts their operation, resulting in 10,000+ jobs leaving a region (like in Wilmington, Ohio). At that point, the local government and supporting entities have an obligation to work to bring jobs to the area. At that point, many actions must take place to see that the communities do not unsafely lose ground where potential employers may not invest.
It is a constant balancing act.
A budget is a short-term prescription. A plan involves the long-term consideration. It is that element our politicians have been unsuccessful with, as they owe so many that want immediate gratification once they get to their office.
Too, we must consider how we stack up in relation to other countries. How many really have balanced budgets? How many don't owe the USA, and how many don't we owe? That's a ridiculous set of books there too.
Something that confuses me...
Bill Clinton supposedly balanced our national budget. But it is his policies that have been so detrimental and cost us. Additionally, his administration was part of that 12 years you quote. Was the balance only momentary? It most surely must have been.
I believe we must look at our situation, and I believe we must - as a country - do better. But I also believe that it will take the people to de-elect every politician in a federal office for more than 10 years to put us on the path to success.
Are they willing? Are we willing?
~Keri
Excellent comment Keri. I definitely agree with you that there are special circumstances that necessitate the use of government funding to remedy. We cannot put dollars over life. On the same token though we need to determine where that money is needed most and the rest of us may have to go without any assistance. On the Ohio example I wonder where all the additional tax revenue went during the considerably lengthy surplus period. That revenue would have been helpful to set aside for the eventual downturn. And we, as citizens, recognize during the good times that we have it good, so likewise we need to set aside rainy day funds. Of course some of us never see our check books balanced and the rest of us in the community are happy to lend a helping hand. Are we willing to make sacrifices so government assistance is reserved for only the most severe situations? I don't know. And then there are programs that were set up sort of backwards in the first place, like social security, where people today are paying the people who worked yesterday, and government unions, where raises are given in times of surplus and then we need to argue about breaching contracts in times of economic downturn. Here's to a new year, that we may all find our way :)
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