Who’s Debt?

July 2, 2009  

The Washington Post editorial for June 28, 2009 is about The Debt Tsunami headed for our country. I rather doubt anyone would deny our debt is staggering by any measure. I have written about this disaster on many occasions. Debt is the death of any nation, and we will eventually prove that beyond any doubt. In historical times, nations went to war with others simply to plunder their treasury so as not to die by the hand of debt. Thankfully (hopefully), those days are past.

Sadly, when our national debt is talked about today, all fingers point to the current administration and their attempts to fix the entitlements program such as Medicare, Medicaid, and health reform. Tax reform that would require everyone, including the wealthy and corporations, to pay their fair share of taxes is also lumped into this “national debt” tsunami. More often than not, the administrations attempt to continue on this wrong road to economic recovery is being touted as a major cause of our debt. There is no question that the latter, if continued, will increase our debt by a sizeable sum. But this administration has only been in office for just over 4 months. Even the most spend-thrifty of President’s couldn’t have run up our debt to the more than $11 trillion dollars we have today. Yet President Obama is often blamed for all that debt.

When George W. Bush took office in January 2000, the national debt was $5.6 trillion. At the beginning of the 2009 fiscal year, the national debt was $9.9 trillion. Thus, under the Bush administration, the national debt rose by $4.3 trillion, a 77 percent increase, and he still had nearly four months left in office (fiscal year is October 1 thru September 30). When Obama took office on January 20^th of this year, the national debt was already more than $10 trillion dollars and growing. But what is everyone talking about? The Obama debt that may be thrust upon us instead of the debt we already have. Why? Because debt acquired and committed before January 20, 2008 doesn’t support the ideological agenda.

By November 26, 2008 $8.5 trillion had already been committed for the bailout. As of March 31^st of this year, that had risen to $12.8 trillion spent, lent, or committed ($4.1 trillion has already been spent) for bailout and economic recovery. To date, the government has admitted that only $159 billion of the “loaned” money will never be paid back. That number is vastly clouded and will likely close in on $1 trillion (probably more) before it’s over. And the “loaned” money that is paid back will take decades to be returned. As time goes by and the public gets use to the idea that bailout money is “spent money” (spilt milk), the desire and pressure to recovery that “loaned” money will greatly diminish. Meanwhile, the cost of lending that money (interest, economic losses, job losses, and government services losses) will grow by leaps and bounds.

Even if President Obama does nothing to advance his administrations’ programs, the national debt is likely to grow to near $15-$16 trillion. This will be largely due to the Iraqi War, the bailout, interest on debt, and the absolute minimum for economic recovery. All of which was not his making.

So here’s a question for us all — if we taxpayers hadn’t have had to bail out Wall Street and the rest of the world, and fix the economy left by a rogue President, just how much debt would we have? For starters, it would be $4.1 trillion less than it is now. While the difference is considerably more debt than the taxpayers of this country should be saddled with, it’s possible that the Obama administration could go forward with some of their plans to make the common peoples lives more acceptable. And if Bush hadn’t borrowed and spent money like a drunken sailor we could probably afford to fix all the problems Obama has in mind. But then — what would the ideologist have to bitch about?