During testimony before the Senate Committee on Homeland Security and Governmental Affairs, Congressional Budget Office director Keith Hall revealed some grim realities about the trajectory of the national debt.
During his attestation, Hall unveiled long-term forecasts which indicate the percentage of publicly-held debt of the U.S. government, when related to Gross Domestic Product (GDP), is reaching levels not seen since the conclusion of the Second World War.
According to Hall’s and the CBO’s projections, the debt currently sits at 74% of the GDP; by 2039 it will become 101% of GDP; and by 2041, it will rise to 103% of GDP.
The United States Treasury Department bisects debt into two brackets. In Treasury’s estimation, there exists both public debt and intragovernmental debt. Publicly-held debt is defined as government securities, notes and bonds in the hands of individuals, banks and foreign entities; our largest foreign holder of American debt is Japan with slightly over $1 trillion.
Intergovernmental debt is described as debt owed to government trusts, primarily the Social Security Trust Fund. Estimates as recent as Hall’s testimony place the current public debt at $13,102,609,587,775, and intragovernmental debt at $5,049,321,696,720. In sum, this reaches an unsettling $18 trillion in total debt.
“Mainly because of the aging of the population and rising health care costs, the extended baseline projections show revenues that fall well short of spending over the long term,” said Hall in a written portion of his testimony. “Producing a substantial imbalance in the federal budget. As a result, budget deficits are projected to rise steadily and, by 2040, to raise federal debt held by the public to a percentage of GDP seen at only one previous time in U.S. history—the final year of World War II and the following year. Eventually, the nation would face a crisis—with wary investors demanding “much higher interest” rates to buy U.S. government debt.”
While the Unites States in not close to the fiasco Greece has become, there is an eerie similarity to the current economic grim and woe in Athens. When lawmakers on either side of the aisle condescend to address the issue of a bloated federal budget with their constituents, they promise modest measures to cut spending and surround the rollout of their proposals with a statistical lightshow complete with placards filled with pie charts and graphs to illuminate their grand designs.
The simple truth is people in Washington don’t need to change, the voters need to replace the people in Washington who have ignored their responsibility to govern with candidates who clutch unwavering fiscal discipline, are rooted in principle and are tempered by common sense.
To serve the public, more accountants, far fewer lawyers and the dismantling of the entire apparatus of the unscrupulous PACs which sustain elected officials in Washington D.C. is the most logical solution.[CSN News] [MintPress News] [treasurydirect.gov] [cbo.gov]