A week ago, the New York Times' published an economics op-ed by Justin Wolfers, senior fellow for the Peterson Institute for International Economics who claimed "the federal budget deficit is back to normal," and threw the following sop to those who are just as concerned with the level of the national debt, writing:
"For those who are concerned about government debt, smaller deficits are surely a good thing. And indeed, because deficits are expected to remain relatively small, total public debt as a share of the economy’s total output is projected to be roughly stable over the next decade. It is only over subsequent decades that the debt is projected to rise, although any economic forecast made decades in advance comes with a sufficiently wide margin of error that there’s also a good chance that it also may fall."
On Wednesday, the Missourian published an editorial, which looked at the national debt, noting the nation "has owed money since the Revolutionary War. They also suggest it is doubtful the country will ever get out of debt although there are occasional efforts to reduce the debt every "now and then." Here's a portion of the Missourian editorial:
"In case anybody is interested, as of Monday, the national debt was $17,868,497,104,334.61. It’s higher when you are reading this since it continues to increase by an average of $2.43 billion every day since Sept. 30, 2012. Yes, that’s $2.43 billion!
"Each citizen’s share is $55,978.73. That’s based on a population of 319,201,559.
"Is anybody concerned? There is a group called the Concord Coalition, a grassroots movement to eliminate the deficit and bring entitlements down to a level that’s fair to all generations. Talk about a challenge!
"The U.S. Department of the Treasury provides daily, monthly and annual figures on the debt — to the penny.
"At the end of FY 2015, the total government debt in the United States, including federal, state and local, is expected to be $21.897 trillion; the total state debt is expected to be $1.228 trillion; and local total debt is expected to be $1.956 trillion."
Unfortunately, as the Committee for a Responsible Federal Budget (CFRFB) wrote in a paper published this week, "the recent fall in deficits is not a sign of fiscal sustainability." Following is the paper's executive summary:
"The FY2014 budget deficit totaled $483 billion, according to today’s statement from the Treasury Department. Although this is nearly 30 percent below the FY2013 deficit and 66 percent below its 2009 peak, the country remains on an unsustainable fiscal path.
"In this paper, we show:
- Annual deficits have fallen substantially over the past five years, largely due to rapid increases in revenue (mostly from the economic recovery), the reversal of one-time spending during the financial crisis, small decreases in defense spending, and slow growth in other areas.
- Simply citing the 66 percent fall in deficits over the past five years without context is misleading, since it follows an almost 800 percent increase that brought deficits to record-high levels.
- Even as deficits have fallen, debt has continued to rise, more than doubling as a percent of GDP since 2007 to record levels not seen other than during a brief period around World War II.
- Both deficits and debt are projected to rise over the next decade and beyond, with trillion-dollar deficits returning by 2025 and debt exceeding the size of the economy before 2040, and as soon as 2030.
"Unfortunately, the recent fall in deficits is not a sign of fiscal sustainability."
The following chart show how the deficit increased from 2007 to 2011, and how they are expected to increase again beginning in 2015:
Take another look at the fourth bullet above, and especially note the expectation that trillion-dollar deficits are expected to return by 2025 and that debt will exceed the size of the economy before 2040.
The CFRFB concludes the paper with this warning:
"The fact that deficits have fallen from their trillion-plus dollar levels is an encouraging sign that the economy continues to recover. Unfortunately, Washington’s myopic focus on short-term deficits has likely slowed the recovery by cutting deficits somewhat too fast in the short term while leaving substantial imbalances in place over the long term.
"While the deficit has indeed dropped significantly, this drop followed a massive increase, was largely expected, and does not suggest the country is on a sustainable fiscal path. Currently, debt levels are at historic highs and projected to grow unsustainably over the long run.
"In only a decade, deficits are projected to again exceed $1 trillion, and within 15 to 25 years debt is projected to exceed the entire size of the economy.
"Policymakers must work together on serious tax and entitlement reforms to put debt on a clear downward path relative to the economy, not declare false victories and sweep the debt issue under the rug."
In an op-ed, posted October 8, 2014 at Investor's Business Daily, Jed Graham warns that "while the fiscal storm that struck six years ago has subsided, the apparent calm is deceptive."
Terry Jeffrey in a commentary piece for CNS News, dated October 15, 2014, frames the numbers in a more personal manner, asking, "Which will be greater: the burden of student debt on Americans who went off this fall to their first year of college, or the amount of federal debt per full-time private-sector worker when these students earn their degrees and start looking for jobs?" His answer:
"There is no doubt: It will be the amount of federal debt per full-time private-sector worker.
"As of last Friday, the total debt of the federal government was $17,858,480,029,490.28, according to the U.S. Treasury. That equaled $200,258.81 for each of the 89,177,000 full-time private-sector workers that, according to the Census Bureau, were in the United States in 2013.
"(There were a total of 105,862,000 full-time workers in the United States in 2013, according to the Census Bureau. However, 16,685,000 of these full-time workers worked for government, getting paid with tax dollars or from government borrowing. That left only 89,177,000 who were self-employed or worked for private-sector employers.)
"Federal debt per full-time private-sector worker has escalated rapidly. At the end of 2007, the total federal debt was $9,229,172,659,218.31, which equaled $101,158.25 for each of the 91,235,000 full-time private-sector workers in the United States that year. In 2000, the total federal debt was $5,662,216,013,697.37, which equaled $66,553.23 for each of the 85,078,000 full-time private-sector workers that year.
"Since 2000, federal debt per full-time private-sector worker has more than tripled."
Readers of Growls who are concerned about the country's national debate in particular, or fiscal policy in general, are urged to contact their members of Congress. Contact information is available at Thomas (use left-hand column). Readers living in Virginia's Arlington County, should contact:
- Senator Mark Warner (D) - write to him or call (202) 224-2023
- Senator Tim Kaine (D) -- write to him or call (202) 224-4024
- Representative Jim Moran (D) -- write to him or call (202) 225-4376
And, tell them ACTA sent you.