Federal Debt
Note: Figures for 2020 are projections based on President Obama’s budget.
Sources: White House Office of Management and Budget; Congressional Budget Office.
Artwork by Jim Sergent, USA Today
Note: Figures for 2020 are projections based on President Obama’s budget.
Sources: White House Office of Management and Budget; Congressional Budget Office.
Artwork by Jim Sergent, USA Today
WOW!!!!!!!! This is some graphic.
This is eye-popping. And depressing. Are you trying to ruin our weekend?
This is stunning and scary. Amazing that Congress spent all of the past year trying to pass a horrible health bill while ignoring the huge debt crisis that looms on the horizon.
This is only the amount of debt the government owes the public (entities different from themselves).
There is also the debt the government owes itself, which is primarily the Treasury borrowing from the trust funds.
This debt is a more friendly obligation, in that the government has an interest free loan, and it gets to simply roll over the principal.
Why is it interest free?
well, when the gopvernment borrows from itself, it creates an asset and a liability. They net each other out in reconciliation.
The “liability” becomes explicit when the trust fund’s outgo exceeds its income. This occurred in 2008 wuth the HI trust fund.
So, all these years of borrowing the government has used the principal abd interest to pay for current government expenses, yet the liability portion has not materialized.
I think that is called float.
I can provide good third party government links to verify this information.
I know it sounds too bad to be true.
Don Levit
The debt the government owes itself is about half the public debt.
With the trust funds starting to go negative, this implicit debt will become increasingly more explicit.
In addition, the annual deficit will become even larger, when the annual trust fund surpluses start to disappear. As most of you know, the trust fund surpluses make the deficit smaller.
Why doesn’t the left hand know what the right hand is doing?
Don Levit
Don Levit makes a good point. Not all the debt that the governement owes itself needs to be paid off. For example, we don’t have to replenish gas tax money the governement took from the highway trust fund.
But it would be hard to renege on our Social Security and Medicare promises.
Excellent graphic! Thanks Don for your commentary. It’s amazing how expensive Social Security and Medicare become when you project the numbers into the future. And now we have the health plan!
I guess the graphic shows debt with or without growth.
A picture really is worth a thousand words.
John;
Do these projections take into consideration the suppressive effect on the total economy that will occur as a result of the cumulative effect on productivity and investment? If not, then the whole thing comes to a conclusion much quicker.
When the CBO makes projections like this it does not take into account feedback effects of debt on the economy. In that sense, CBO estimates are almost always “static,” rather than “dynamic.” This has been something bothering CBO critics for a long time.
This graphic is actually a bit terrifying.
It gives a whole new meaning to the idea of red ink.