Ilustrações: domínio público
America’s
Unsustainable Debt Crisis
By David Milstein, AFP New Jersey Policy Analyst
The greatest threat
to future American prosperity is the debt and deficits that continue to shackle
the largest economy in the world. This year, our national deficit will be $1.65
trillion while our national debt is currently $14.3 trillion. The debt comes
out to more than $46,000 for every man, woman and child in America. In just
four years, the Democrat controlled Congress spent more money than every
previous Congress combined, putting their out of control spending on the tab of
future generations.
In the last two
years, President Obama has warned us about our growing debt yet his rhetoric is
never followed by any serious action. In his first two budgets, there was a 24%
increase in federal discretionary spending. Including the “stimulus” package,
discretionary spending jumped 84% since Obama took office. In response to his
spending binge, the President offered to cut merely $6 billion in his new
budget for 2011, which is less than 1% of our national debt.
When Republicans took
over the House in January, they offered their own plan to cut $61 billion,
which is ten times what the President proposed. But $61 billion is a drop in
the bucket. Not surprisingly, the Republican proposal failed to pass the
Democrat controlled Senate.
Just last month, the
US recorded its largest monthly budget deficit of $223 billion, a 14% increase
from just a short year ago. And by the end of the year, our national debt will
exceed our gross domestic product. Yes, you read that correctly. Since
President Obama’s own budget predicts our national debt will be $15.5 trillion
by the end of the year and our GDP is about $14.6 trillion, America will soon
have more than a 100% debt to GDP ratio. By 2030, the Congressional Budget
Office predicts the debt will be double the entire US economy. America hasn’t
charged this amount of money on its credit cards since World War II, when our
debt as a percentage of our GDP was an astounding 108.6%.
Simply put, we are
living beyond our means. We continue to spend money we do not have and our
dependence on foreign nations continues to grow. China is the greatest
proprietor of our national debt, holding about 10% of our public debt. This may
sound like a small percentage, but it amounts to $1.2 trillion, which is the
same as China’s national debt. If China’s state and local governments are
included, their national debt is only $3.6 trillion, which is a little less
than one-fifth the size of our national debt.
Most of their debt is
held domestically while more than half of America’s debt is held by foreign
nations. Not only are more Americans becoming more and more dependent on
government, our country is becoming more dependent on foreign nations to pay
its bills. And as the United States continues to barely have positive economic
growth, China has just overtaken Japan as the second largest economy. In the
last five years, China’s economic growth has averaged 11.2% while the US
economy has averaged only 3%. As China’s economy continues to soar, the US is
handing our economic future to our biggest competitor.
As our debt continues
to balloon, the interest alone will rise from $220 billion to $860 billion by
2020. The interest skyrockets by 400% in less than nine years. To put that in
perspective, that is roughly the size of the “stimulus” package, which President
Obama promised would keep the unemployment rate below 8%. But our unemployment
rate currently sits at 8.9% with 14 million Americans still out of work.
Every single day
America is borrowing roughly $5 billion to fund our government and we are
borrowing 40 cents out of every dollar just to stay afloat. The largest drivers
of our national debt are the entitlement programs, which the White House and
congressional Democrats refuse to address and Republicans are simply afraid to
reform. Entitlements consume 56% of total federal spending and will double by
2050. By 2052 they will make up all of our tax revenue.
On March 15th House
Republicans passed another short-term continuing resolution to fund the
government for the next three weeks. It cut $6.1 billion on a day when our
national debt increased by $72 billion. These small cuts were more than what
the Democrats were willing to cut over the next seven months.
Congress and the
White House aren’t even close to seriously addressing our fiscal disaster. It
is time our government step up and enact serious fiscal reform by cutting
spending, limiting the size of government and reforming the unsustainable
entitlement programs for our future as a prosperous nation depends upon it.
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