To infinity and beyond!
The United States of America is $12 trillion in debt.
It’s actually worse than that, but let’s start there. The “National Debt Clock” above the IRS office on 45th Street in midtown Manhattan tripped the $12 trillion level this week. (It actually crossed the mark on Monday, according to the Treasury Department’s website, but I noticed it this morning.)
And that is just the actual, concrete debt. There are tens of trillions more in so-called unfunded liabilities — promises made to current and future recipients of Social Security and Medicare — that push the national debt up to somewhere in the $50-$60 trillion range.
How do you grasp a problem that big? It’s hard. The problem (with grasping it) isn’t that the problem (the debt) isn’t real, it is painfully real, the problem is that it isn’t a problem the way, say, the collapse of Lehman Brothers was a problem. That is to say, in America today, if it doesn’t explode, people don’t see the problem.
But make no mistake, friends, this is a problem that will grind the economy into dust, in a gradual, evolutionary kind of way. It’ll take years, maybe decades, a slow, grueling, almost invisible force. But if we do not address this, now, we, and our children, will wake up one day in a far less prosperous place.
We are going down, as I first saw Harvard’s Greg Mankiw call it, an unsustainable path. And we are barreling down it.
I’ve gotten an advance copy of David Walker’s “Comeback America,” (due out in January.) Walker is a former comptroller general of the U.S., and a fierce critic of the government’s handling of the public purse. He’s currently heading up the Peter Peterson Foundation (they made the movie “IOUSA.”) I’m only a few chapters into the book, but it makes for sober reading. This is how he opens the preface:
America is a great country — the greatest, as far as Americans are concerned. But its future is threatened, and we same Americans are the threat. I am talking about our nation’s deteriorating financial condition, perpetrated by all of us, and especially by the government that represents us.
He points out the obvious: the nation is in a $56 trillion hole (as of September 2008; as he points out, it’s a moving number and is likely north of $60 trillion today.) Walker served in four administrations, and takes a nonpartisan line in assessing the nation’s health, which is good, because both Democrats and Republicans deserve heaps of blame (as well as, ahem, we the people.)
How big is the problem? Look at this year’s deficit. “The $1.6 trillion deficit translates to $3 million of debt accumulated each minute, $180 million an hour and $4.3 billion a day. Think Warren Buffett is rich? His net worth is only about 2.3% of that $1.6 trillion.” (At the time he was writing, I suppose, the deficit was projected at $1.6 trillion; it’s come in closer to $1.4 trillion.)
These are forces that will ruin the country, there are no two ways around it. We do not have a work force growing fast enough that we can earn our way out of it, unless we raise taxes to levels nobody has ever see before. You want to see the Tea Party crowd go really nuts?
The way we are going now, which is basically to pretend it isn’t happening, this is a debilitating burden we are going to hand to our children. “They are my grandchildren, and I am embarrassed by the mess we are passing on to them,” Walker writes. I have a son, and I feel the same way.
Walker promises concrete solutions to the problem, and as I go through the book I’ll try and share them. But this is a book (and I’m not doing Random House’s job for them, either; they didn’t even send me the advance copy, they sent it somebody else here, who left in an an “unread books’ bin) that should be must reading for every thinking American.
This is a real problem. It must be treated as such.
(Photo: Paul Vigna)
Strider
John
napster
middyfeek
scothammer
Paul Vigna
Peter Sweet
November 20, 2009
Thanks for the great post, please continue to update us as you read.
First of all, let’s not forget who put us here. This MUST be understood by the nation as the first step to getting us out of it. It started with one of the worse presidents ever (Reagan), and continued as a 30-year Republican tax-cut and spend policy, slowed only during the Clinton years. In that entire time (except for Clinton), Republicans controlled the white house (budget veto power). Republicans controlled the legislature most of the time, and in general, the nation took a sharp turn to the right politically, and we’re still there - even though it’s just starting to turn now. For example, imo, Eisenhower was to the left of Clinton, and Eisenhower was a republican.
Debt:
http://en.wikipedia.org/wiki/File:USDebt.png
Control of congress:
http://uspolitics.about.com/od/usgovernment/l/bl_party_division_2.htm
As bad as things are, I actually believe we still need to spend even more to help the jobs situation. IMO, it’s all about jobs - we should have done this at the start - not ‘make-work’, but real work, like the WPA, which gave us some of the best civil engineering this nation has seen - even today. For example, a national program for green energy, retrofitting homes with solar, for example. See similar comments by Krugman:
http://krugman.blogs.nytimes.com/2009/11/19/invisible-bond-vigilantes/
and
http://krugman.blogs.nytimes.com/2009/11/20/interest-rates-the-phantom-menace/#more-5561
IMO, the first step to cutting government spending is to stop both occupations now, and cut the military by 2/3 at least and close most of the overseas bases. We don’t need, want, and cannot afford Jim Baker’s strategy of ‘world-wide force projection’ or whatever the hell he calls it.