Federal deficit/surplus
1998: 69.27 billion
1999: 125.61 billion
2000: 236.24 billion
2001: 128.24 billion
2002: -157.76 billion
2003: -377.59 billion
2004: -412.73 billion
2005: -318.35 billion
2006: -248.18 billion
2007: -160.70 billion
2008: -458.55 billion
2009: -1.41 trillion
2010: -1.29 trillion
2011: -1.30 trillion
2012 estimate: -1.33 trillion
Source: White House Budget Office
On the wall at the Republican Convention is a big, bright ticker that shows America’s national debt climbing higher and higher in real-time. GOP Chairman Reince Priebus said debt clock highlights the “unprecedented fiscal recklessness of the Obama administration.”
The RNC’s debt clock is ticking upward to about $16 trillion and includes money that Congress borrowed from trust funds to pay for current federal spending. Another way to measure it is to look at just publicly-held debt – money the government owes to outsiders – which is projected to be $11.3 trillion by the end of 2012, according to the Congressional Budget Office.
How did we get into such a mess and how much blame goes to the Obama administration?
The federal government ran a surplus – spent less than it brought in – from 1998 to 2001 but has run a deficit since 2002. Some of the deficit spending and debt accumulation began under the Bush administration but in the last three years, another $4 trillion in debt has been added under the Obama administration, according to the White House budget office.
The Bush Administration pushed through across-the-board tax cuts in 2001 and 2003 that reduced federal revenues. Then the 9/11 terrorist attack pushed the economy into a deeper recession and led to a ramping up of military spending for the wars in Iraq and Afghanistan as well as homeland security. And then in 2006, Medicare Part D prescription drug coverage was added for millions of seniors at a cost of billions of dollars.
Under the Obama administration, the tax cuts were extended, a massive economic stimulus package was approved, and revenues tailed off a deep recession as fewer people were earning paychecks and paying taxes.
“What is significant is that we have a very rapidly growing debt relative to our economy that tells you you’re on an unsustainable track” said Bob Bixby, executive director of the non-partisan Concord Coalition, which has been advocating for long-term responsible fiscal policy since 1992. “It doesn’t do much good to look back and assign blame, though we are going to get a lot of that on the campaign trail.”
Generally, politicians are loath to cut popular government programs or raise taxes, which are the two things they can do to address deficits. Both tax hikes and spending cuts are scheduled to automatically take place at the end of the year as part of the debt ceiling deal reached in August 2011. Economists are warning that the so-called “fiscal cliff” could plunge the country back into a recession.
“The fiscal cliff would be good for the budget, bad for the economy,” Bixby said.
Long-term, though, Democrats and Republicans must address the drivers of all this debt: Medicare, Medicaid and Social Security. These federal programs are eating up more money as health care costs rise and Baby Boomers become eligible for them.
Bixby said neither the Romney or Obama campaigns have been providing details on how they would arrest deficit spending and address the debt.
Bixby said a key measure is the debt as a percentage of the economy. That hit 73 percent of the gross domestic product this year.
“A logical question is how much is too much? The answer is nobody knows and it’s foolish to try to find out,” Bixby said. “By the time you’re there, it’s too late.”
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