As Tyler Durden notes, this is the “most disturbing sentence uttered during the debt ceiling debate/government shut down.” America is now going on $17 trillion in debt, a level of insolvency that would already be regarded as catastrophic if the Fed were not keeping interest rates close to zero.
The federal deficit declined in FY 2013, which ended on September 30. Final numbers are not yet available, but it is estimated that the FY 2013 deficit will be around $650 billion. This represents some improvement: it is the first time during the Obama administration when the deficit has been below $1 trillion.
The declining deficit is due to the election of a Republican House in 2010, which led to the sequester, and to tax increases. But in historical perspective, a $650 billion deficit is nothing to celebrate: the U.S. has never run a deficit anywhere near that big in any fiscal year when Barack Obama was not president. Don’t be fooled by Democrats who try to attribute FY 2009 to George Bush. The Democratic Congress didn’t pass spending bills covering the vast majority of FY 2009 spending until Obama was safely in office, and FY 2009 includes the Obama/Pelosi/Reid “stimulus” spending, with which George Bush, obviously, had nothing to do. The largest deficit of the George W. Bush years was $459 billion, in FY 2008, the year when financial markets collapsed. The largest deficit of the Clinton years was $255 billion; of the George H.W. Bush years, $290 billion; and of the Reagan administration, $221 billion.
Bad as things are, they are likely to get worse: according to CBO projections, the current deficit decline is temporary, and deficits will soon begin to climb again as baby boomers retire and consume untold trillions in Social Security and Medicare benefits. There are around 72 million American children under the age of 18. If you do the math, assuming they are on the hook for our debts, that means that currently, each American child is around $236,000 in debt. Since only around one-half of Americans are federal income taxpayers, it would be more accurate to say that each future taxpayer owes $472,000. If two of them get married, they owe just short of $1 million, with more debt being piled up every day and with interest costs sure to increase.
These numbers can be sliced and diced in various ways, but any way you look it it, it is insane that those in Washington who wanted to blow past the statutory debt limit without hesitation so that we can “pay our bills” are hailed as responsible. Here is a hint: if you have to borrow money to pay your bills, you aren’t paying your bills.