National Debt Passes $13 TrillionMay 30th, 2010 by Lee Eldridge
Our national debt has now passed $13 trillion, and will surpass $14 trillion before the year is over. That is just amazing to me. Take a look below at the escalation of our national debt in recent years, and notice the huge jumps during the last few time periods.
So what does this mean? Nothing good, I guarantee you that. A ballooning national debt will be a significant drag on our economic recovery, and could be partially responsible for driving us into another recession — what many refer to as a double-dip recession.
A Look Back
In 1990 our national debt was approximately $3.2 trillion. Despite the strong economic times of the ’90s, our national debt grew to approximately $5.6 trillion by 2000. That’s an increase of 75% over a ten year period. While that seems like a lot to me, that’s by far our best decade since 1960-70 where our debt increased by only 31%.
In comparison, from 1970 to 1980, our national debt more than doubled from $381 billion to $909 billion. And from 1980 to 1990, our debt increased more than threefold from $909 billion to $3.2 trillion. (During the ’80s, Reagan was spending tons of money on the military, and the democratically controlled Congress was spending tons of money on everything else. The ’80s were an interesting economic period that we can discuss at a later time.)
Now let’s look at what’s been going on this last decade. From 2000 to 2010, our national debt will have increased from $5.6 trillion to approximately $14.4 trillion, though that’s still an estimated figure. It could end up higher than this. That’s almost a tripling of our national debt in only 10 years.
This is why I don’t like either party. The Republicans like to pretend that they’re the party of financial discipline, but while they largely controlled Congress from 2000 to 2006, our debt grew from $5.6 trillion to $8.4 trillion. While not a booming economy, this was certainly a period of steady growth. There’s no good excuse for increasing our national debt by 50% during this six year period.
The Democrats condemned the Republicans as fiscally irresponsible. So what has happened since they took control of Congress in 2006? Our national debt is expected to balloon to $14.4 trillion by year’s end. They’re close to doubling our debt in only four years. Add to that another whopping increase anticipated over the next five years of approximately $5 trillion. By 2015, it’s expected that our national debt will be approximately $20 trillion.
Democrats are going to write to me and tell me I’m wrong. That our national debt is ballooning because of the recession caused by Bush, and that recessions reduce tax receipts to the federal government. And they’re partially right. Recessions DO decrease tax receipts. (We can debate at another time the primary causes of this recession — Bush was only a piece of the puzzle that was built over the last 20 years that caused this recession.) But that’s why we MUST pay off debt during periods of economic growth. A small level of deficit spending during a recession is needed, in my opinion. You can’t shut down federal programs that our public relies on for everyday life. That’s why I do not support a balanced budget amendment. But the only way deficit spending during a recession makes sense is when you’re paying OFF the debt during periods of economic growth.
So why do I say that they’re partially right? Because the out of control spending from our federal government is HURTING our economy, not helping it. And by hurting the economy, they have further exasperated the problem of reduced tax receipts to the federal government.
What To Do
They’ve got to get spending under control. It will be painful, but it can be accomplished. Some economists are predicting a lost decade. That we can’t return to economic prosperity any time soon. I say they’re wrong, but I’m an optimist at heart.