by Mitch Kokai
Senior Political Analyst, John Locke Foundation
Thomas Donlan of Barron’s turns his attention this week to the federal government’s mounting debt.
While the candidates for president of the United States roamed through frosty Iowa and New Hampshire in search of votes, few of them (and even fewer reporters trailing them) paid any attention to the elephant in the snowbank: None of the candidates should want the job, because the finances of the country are in peril.
The Congressional Budget Office officially declares that we’re in too deep. After six years of shrinking from the horrible deficits of 2009 and 2010, the deficit is growing again. And though President Barack Obama’s last budget message says nothing about it, the Office of Management and Budget’s documents show the same thing.
Last month, the gross federal debt exceeded $19 trillion, far beyond the debt incurred 70 years ago, following a period of total war. After adjusting for the 92% decline in the value of the dollar since World War II, the 1946 debt works out to be just $3.28 trillion. However, 1946 still holds another record at 118% of gross domestic product, compared with 101.8% now.
There is another important difference between 1946 and the present: After WW II, the borrowing all but stopped, and the country’s economy grew faster than federal spending. Today, nobody intends to stop the borrowing, and the economy is sluggish.
When a war ends, we don’t keep blowing things up. But there’s no end to spending on big programs for people—Social Security, Medicare, Obamacare, and Medicaid. By the way, federal accounting does not deign to notice about $90 trillion worth of promises to present and future beneficiaries.