Total public debt — excluding student loan, mortgage and credit card debt — exceeds $15.9 trillion. And that number keeps rising. Lawmakers have intensified their calls for massive fiscal reform, citing ballooning debt loads and unsustainable government spending.
The national debt has been growing at a faster rate than GDP and some experts say the debt burden could push the country toward insolvency over the next few decades. According to a June Congressional Budget Office (CBO) report, federal debt will exceed 70 percent of GDP by the end of this year — the highest percentage since the end of World War II when the national debt was 121 percent of GDP. But the CBO also notes that U.S. public debt will shrink to 53 percent of GDP this year if the Bush-era tax cuts and other short-term tax breaks expire at the end of the year.
Four years ago federal debt equaled 40 percent of GDP — slightly above the 40-year average of 38 percent, the report said. The CBO projects that federal debt as a percent of GDP could top 200 percent by 2025 if current fiscal policies remain in place.
There are several factors that have caused the federal debt to soar to uncomfortable levels. Tax cuts enacted during the George W. Bush administration, the Iraq and Afghanistan Wars, the Troubled Asset Relief Program (TARP) and stimulus spending in 2008 have all greatly increased the deficit. The government has also taken in less revenue from businesses and individuals because of the prolonged economic slowdown.
David Walker, former U.S. Comptroller and CEO of the Comeback America Initiative, rejects the $15.9 trillion debt calculation. According to Walker, the U.S. government owes $70 trillion — 77 percent more than the publicly stated amount — and the national debt grows at a rate of $10 million a minute. He counts all unfunded Social Security, Medicare and retiree pension promises in his calculation. The CBO estimates that federal spending on the nation's major health care programs would grow from 5 percent of GDP to 10 percent by 2037. Social Security spending will rise more slowly from 5 percent to 6 percent in 2030. All together these programs will account for 16 percent of gross domestic product — up from the current 10 percent — in 25 years.
As much as Walker decries the growing "federal financial hole," he says there's an even bigger crisis facing the nation.
"The biggest deficit this country has today is not a budget deficit but a leadership deficit," he says in the attached clip. "Our elected officials are not talking about the tough choices. Washington is badly broken."
He argues that neither President Obama nor GOP presidential candidate Mitt Romney have a viable plan that reins in spending and successfully tackles the deficit. That's why Walker has started the "$10 Million a Minute Tour," a bus tour that will drive across the nation to educate Americans about the U.S. debt crisis and the so-called "fiscal cliff."
The tour kicks off Sept. 7 in Manchester, N.H. and will "show Americans what they can do to help restore fiscal sanity."
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- Budget, Tax & Economy
- credit card debt
- national debt