With Debt Limit Raised, America Continues Its Headlong Descent Into Bankruptcy

Yesterday’s House vote to raise the debt ceiling was seen as a victory for President Obama and the Democrats. Nancy Pelosi reportedly told her caucus not to “gloat” over their big win. Well, no: increasing the nation’s debt by another trillion dollars is not something to gloat over.

Commentary on yesterday’s vote (including mine) focused mostly on the political context. But with federal debt already well in excess of $17 trillion, it is remarkable that more attention is not being paid to America’s headlong descent into bankruptcy. Jeff Sessions offered this somber assessment of the debt limit bill:

This measure would increase America’s debt limit approximately $1 trillion while failing to reduce spending by a single penny. And the legislation takes no steps whatsoever to eliminate gimmicks that allow spending above our budget limits. The tax, spend, and borrow agenda in Washington has not worked: wages are down, the workforce is smaller, and our children are threatened with a debt crisis. We must take firm, principled steps to get Americans back to work—without adding to the debt—and to grow the middle class. This clean debt ceiling increase will grow nothing but the debt and will only make life harder for working Americans. I oppose it.

As far as I can tell, there is not a single Democrat in Washington who is concerned about saddling our children with trillions upon trillions in debt. I ran through this arithmetic some time ago; since then, the numbers have only gotten worse:

Currently there are around 74 million children under the age of 18 in the U.S. If you divide our $16.4 trillion debt by 74 million, you get $222,000 apiece. If you assume that two of those kids get married, they owe $444,000 together. And if you assume that your kid is going to be one of the 50% who pay any discernible amount of income taxes, the tab comes to close to $1 million.

Last week’s annual CBO report made news mostly for what it said about Obamacare, but as always, it contained a wealth of information about the federal budget. This chart shows the federal deficit (or surplus) as a percentage of GDP. Note what happened after the Democrats took control of Congress in 2007. Click to enlarge:

Deficits00387

This one compares certain aspects of federal spending and revenue in fiscal years 1974, 2014 and 2024 (projected), again as a percentage of GDP:

SpendingRevenue0287

Many conclusions could be drawn, but the most obvious is that entitlement spending, especially on health care programs, is eating up the federal budget and destroying our children’s future. Obamacare will only make matters worse, if it is not repealed.

So no one should be gloating over the House vote to raise the debt limit. As I wrote yesterday, the debt limit, often derided as an anachronism, has the great virtue that it periodically forces voters to focus on the fact that we are careening steadily deeper into debt.

shutterstock_77390359

Image courtesy of Shutterstock.

Responses