The United States government is currently a bazillion dollars in debt and is continuing to engage in bazillons more in deficit spending each year. The amounts of the debt and deficit are actually counted in trillions, but it might as well be bazillions. The amount is so large that it is impossible for most to comprehend, so a fictitious number representing an unfathomable amount seems fitting.
The Associated Press reported this week, “Figures released by the White House budget office foresee a cumulative $9 trillion deficit from 2010-2019, $2 trillion more than the administration estimated in May. Moreover, the figures show the public debt doubling by 2019 and reaching three-quarters the size of the entire national economy. Obama economic adviser Christina Romer predicted unemployment could reach 10 percent this year and begin a slow decline next year. Still, she said, the average unemployment will be 9.3 in 2009 and 9.8 percent in 2010.”
Reuters reported, “The spending blitz could push the national debt, now more than $11 trillion, to close to $20 trillion.” Twenty trillion? A bazillion? They both sound equally unreal. In an effort to put the current economic situation into perspective, Mark Tapscott cited Brian Reidl at the Heritage Foundation.
· This year, Washington will spend $30,958 per household, tax $17,576 per household, and borrow $13,392 per household. This spending is not just temporary: President Obama would permanently keep annual spending between $5,000 and $8,000 per household higher than it had been under President Bush.
· The 22 percent spending increase projected for 2009 represents the largest government expansion since the 1952 height of the Korean War (adjusted for inflation). Federal spending is up 57 percent since 2001.
· The 2009 budget deficit will be larger than all budget deficits from 2002 through 2007 combined. More than 43 cents of every dollar Washington spends in 2009 will have been borrowed.
· One would expect the post-recession deficit to revert back to the $150 billion to $350 billion budget deficits that were typical before the recession. Instead, by 2019, the President forecasts a $917 billion budget deficit, a public debt of 77 percent of GDP, and annual net interest spending of $774 billion.
· The White House projects $10.6 trillion in new deficits between 2009 and 2019—nearly $80,000 per household in new borrowing.
· The White House underestimates future budget deficits by trillions of dollars by (1) assuming that discretionary spending will be frozen to inflation for the next decade, (2) assuming that cap-and-trade revenues will be available to finance a Make Work Pay credit (the House-passed bill allocates those revenues elsewhere), (3) assuming health care reform will be deficit-neutral, and (4) assuming certain tax increases that are unlikely to be enacted.
Reidl also notes that none of the estimates mentioned include the cost of proposed health care legislation, or the coming increased costs from Social Security, Medicare, and Medicaid.
Not only are the numbers almost impossible to comprehend, but the overall state of the economy is difficult to grasp. In addition to the problem of unprecedented spending, a recent report in the Wall Street Journal points to problems with the value of the dollar.
Neil Shah wrote, “In a new twist to an old refrain among economists, who have long worried about the effects of growing U.S. debt, they say that the huge liabilities the U.S. is taking on to dig its way out of crisis could ultimately undermine faith in the dollar.” Shah quoted Clair Dissaux, managing director of global economics and strategy for Millennium Global Investments Ltd., a London investment firm specializing in currencies, “There has been a lot of disappointment with the way the U.S. credit crisis was handled. The dollar's loss of influence is a steady and long-term trend.”
Unfortunately it does not appear there is any quick and easy way out of the current economic abyss, but at the very least we have to stop the runaway spending. There can come a point when a personal debt becomes so excessive that there is no possible way to pay it off in a lifetime without a considerable increase in income . Many of those in power today evidently don’t find the governments’ ratio of debt to income to be a problem as long as there are future generations to stick with the tab.
The trillions of dollars of deficit spending projected over the next decade are difficult to fully comprehend. Just think of the number as bigger than anything you can imagine and you’ll be getting close though. It isn’t necessary to refer to the numbers in “bazillions.” There are many other fine fictional numbers – katrillion, gazillion and the very similar, bajillion – available as well.
Posted at American Issues Project.com.