Pete Kasperowicz explains in a Washington Examiner column why it’s growing faster than you think.
Most people think of the national debt as a huge amount of money the government owes, which grows each year because of the budget deficit, which is the amount of new money the government has to borrow to maintain current spending levels.
But the national debt is growing much more quickly than that. Over the last decade, the debt has expanded by more than $3 trillion beyond the sum of the government’s budget deficits over that same period of time.
In most years, in fact, the government’s reported budget deficit is lower than the actual growth in the national debt. Fiscal 2016 was a perfect example.
Just weeks ago, the Treasury Department reported a $587 billion budget deficit for the fiscal year. But according to the government website that tracks the total U.S. debt “to the penny,” the actual national debt grew by about $1.4 trillion.
Why such a big difference? Some of it has to do with politics and timing, and most years weren’t as skewed as 2016.
When fiscal 2016 began, the U.S. had already reached the debt ceiling, and normal borrowing had been frozen for several months. That means the total debt level started at an artificially low point, and quickly rose from there.
On the first day the debt ceiling was lifted, pent-up borrowing demand prompted the national debt to jump more than $300 billion.
But there’s a more fundamental reason why the national debt is growing faster than the government’s annual budget deficit. And that is: The budget deficit is not the only way the national debt grows.
The budget deficit encompasses a discrete set of borrowing decisions, and it’s still far and away the main reason behind the growth of the debt. But the other means of borrowing that aren’t included in the budget deficit are significant.
For example, in the last 10 completed fiscal years, budget deficits totaled $7.9 trillion. But the total national debt rose by a little over $11 trillion.
