It’s hard to wrap your mind around our national debt. Right now it sits at $14 trillion and soon Congress will decide whether to raise the debt ceiling, which is now at $14.294 trillion, before we hit it in March.
Just for reference, a billion is equal to 1,000 million. There are a million millions in a trillion. Yeah, and we’re in debt over 14 of them.
A distinction needs to be made between the deficit and the debt. The deficit is how much more we’re spending each year than we have in tax revenue. The cumulative effect is the debt.
The assumption by some is that debt and deficits are just a way of life for our government. Not so. Newt and the gang managed to take us from a $203 billion deficit in 1994 to a $69 billion surplus in 1998. In fact, we ran a surplus all the way through fiscal year 2001. Then 9/11 hit and our tax revenue took a dive.
Tax receipts in 2001 dipped, the first time that had happened since 1983. Thanks to the Bush tax cuts we began to recover in 2004 when year-over-year tax receipts began to grow once again. In fact, we were heading for another surplus when the bottom fell out in 2008. The deficits began to balloon again going from $186 billion in today’s dollars in 2002 to $1.3 trillion in 2010!
To put that in perspective, the highest deficit we ran during World War II was $669 billion in today’s inflation-adjusted dollars. Our yearly deficit is twice that!
Now President Obama and the Democrats want to raise the debt ceiling yet again. The reality is we’re probably going to have to do it because of the fear of defaulting on our debt, but the Republicans are trying to get some spending concessions out of the deal. The question is will they get enough to avert financial destruction?
I’m not suggesting that we not raise the debt ceiling and default on the debt, but I certainly don’t think it would be as catastrophic as the analysts predict if we didn’t raise the ceiling. For starters, we wouldn’t be defaulting on the entire debt. We simply would not be able to run up any new debt. In other words, in order to keep our debt obligations below $14.294 trillion we would have to cut something.
What that something would be is a matter of debate. Former Congressman Dick Armey, who now heads up FreedomWorks, suggests that military spending should not be sacrosanct. He’s right, you know.
Too many conservatives are willing to talk about spending cuts up to the point where the military is part of the discussion. Now before you get your nose out of joint, I’m not talking about damaging the effectiveness of the military but you can’t tell me there’s not waste in that sector of our government. Every rock needs to be overturned in our quest to reign in spending.
But even if you eliminated the entire military budget, you wouldn’t solve the problem. The problem is and always has been so-called entitlement programs. I’ve always disliked that word, “entitlements.” When it comes to Social Security and Medicare, sure, we’re entitled to them because we paid for them. However, the government has so screwed up those programs that they can’t be fixed without pain. The rest of the so-called entitlements, like all these welfare programs, must be greatly modified or they’re going to take us all down with them.
The Republicans are back in the driver’s seat. This time, try not to wreck the car.
