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Hey Big Spenders

Binyamin Rose

President Obama’s 2012 budget introduced last week in Congress may be most notable for the $1.6-trillion-dollar deficit it is expected to leave in its wake. But Obama’s in good company. This will be the fourth consecutive year in which the deficit will exceed $1 trillion — and for the foreseeable future, it is far from the last.

Wednesday, February 23, 2011

The US debt clock keeps ticking inexorably from $14 trillion, going on $15 trillion. Only in one’s wildest dreams can one imagine turning the clock back to the blissful days of 1835, when Andrew Jackson was president and America’s national debt was a paltry $33,733.05. (Those extra five cents, in those days, would have been denominated as a half- dime coin.)

The year 1835 was the closest America’s budget ever actually came to being in the black. Ever since the start of its first fiscal year in January 1789, when the young nation owed more than $70 million in Revolutionary War debts, the United States has been a nation that lived off its charge card. During its first 200 years, when America did plunge into debt, it was mainly to pay for wars — which they usually won, so it was considered money well spent. To envision just how large a debt the nation has accrued at the onset of 2011, imagine a stack of one dollar bills piled to a height of 110 miles.

Like anyone who borrows money, America has to pay interest on that debt. For 2012, the interest alone will reach an estimated $233 billion. That’s the same amount that the White House has allocated for such expenditures as food and nutrition assistance, housing assistance, and child tax credits. The more America has to pay out in interest, the less money it has available to fund more vital programs.

President Obama has submitted a proposed $3.7 trillion federal budget with a $1.6 trillion deficit for 2012. The budget deficit measures the excess amount that the government spends above what it receives each year, while the national debt refers to the cumulative totals of all of these annual deficits. They are two separate figures, and each has risen to record — and worrisome — levels.

There is rare consensus in Washington that the budget bleeding has to stop now, but with Congress arguing over a meager $40 billion in budget cuts, it is unlikely that any serious action will be taken until after next year’s presidential election, if then. Republicans like to blame tax-and-spend Democrats, while Democrats like to lay the guilt on Republicans for cutting taxes on corporations and the wealthy at the expense of the little guy. A hard look at the facts demonstrates that each party deserves its fair share of the blame for the budget predicament.

 

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