Consumers are not the only ones struggling with debt these days. According to the White House Office of Management and Budget, the federal government will add approximately $9 trillion in debt over the next 10 years, nearly doubling its burden from more than $11 trillion to nearly $20 trillion. The figure is almost 30% higher than the $7 trillion estimate made just six months ago. The deficit for this year alone is $1.58 trillion, which is the highest as a percentage of GDP since World War II, and next year is expected to bring an additional $1.5 trillion deficit. To put that in perspective, consider that last year’s $459-billion deficit was a record, but now the White House and the Congressional Budget Office are projecting deficits greater than $500 trillion every year until 2019. The ratio of national debt to GDP will rise from 48% this year to an estimated 69% in 2019. By any measure, this is simply a crushing debt burden.
Add to all this the fact that Social Security and Medicare have a combined unfunded liability of about $107 trillion. Yet the Obama administration is still pushing its $1 trillion health-care proposal. (And if anyone thinks the costs of such a program, if it passes, will be anything less than many times that estimate, I’ve got a bridge to sell you.) At what point do these debt figures stop being mere numbers and start being real money? When we hit $1 quadrillion?
To be fair, the debt is not solely the fault of the Obama administration. In fact, as the administration noted, a good portion of the debt is due to the financial mismanagement of George W. Bush’s administration, which oversaw a growth in government spending greater than that under any president since LBJ. If Obama’s health plan and continuation of the economic “stimulus” spending is any indication, though, he does not seem likely to reverse this course. Yes, borrowing and spending our way to fiscal ruin has certainly been a bipartisan policy.
The U.S. government has been spending money like a teenager off at college with his first credit card. The thing about debt is that eventually the bills come due, however. Barring a radical departure from its free-spending, big government, nation-building ways, the American empire will go the way all empires inevitably go: crumbling down under a mountain of debt. IOUs can only last for so long. (Just ask California.) What will happen when the bill collectors come a-callin’?