July 1, 2010
UPDATED: The Bill Will Come Due
Kevin Williamson has totaled America's public debt, and his essay makes for scary reading:
So that's $14 trillion in federal debt and $2.5 trillion in state-and-local debt: $16.5 trillion. But I've got some bad news for you, Sunshine: We haven't even hit all the big-ticket items. ...... "Half the states' pension funds could run out of money by 2025," [Northwester University Prof. Joshua Rauh] says, "and that's assuming decent investment returns. The federal government should be worried about its exposure. Are these states too big to fail? If something isn't done, we're facing another trillion-dollar bailout." ...
So how much would the states have to book to fully fund those liabilities? Drop in another $3 trillion. Properly accounting for these obligations, that takes us up to a total of $19.5 trillion in governmental liabilities. ...
The debt numbers start to get really hairy when you add in liabilities under Social Security and Medicare — in other words, when you account for the present value of those future payments in the same way that businesses have to account for the obligations they incur. Start with the entitlements and those numbers get run-for-the-hills ugly in a hurry: a combined $106 trillion in liabilities for Social Security and Medicare, or more than five times the total federal, state, and local debt we've totaled up so far. In real terms, what that means is that we’d need $106 trillion in real, investable capital, earning 6 percent a year, on hand, today, to meet the obligations we have under those entitlement programs. For perspective, that's about twice the total private net worth of the United States. (A little more, in fact.)
Little wonder the Democrats in power think nothing of layering on the billions: Billions hardly register in the face of that mountain of debt. The cover of the penultimate National Review, in which Williamson's piece appears, shows a distressed boy looking at a chalkboard that reads "130 Trillion: What We Owe." The image got me pondering how one could illustrate the size of a trillion dollars, and I'm still pondering. One idea is to start in the upper left corner of the chalk board with a single dot, labeled "trillion." The next row would be labeled "billions" and would require 1,000 small dots. The next row, "millions," would easily exceed the capacity of the average classroom chalkboard.
My personal circumstances are such that the lessons of debt are hourly on my mind. To oversimplify, a slightly less luxurious lifestyle a decade ago (with dinners out and the like) would have meant that I wouldn't be quitting coffee because a large $8 can of grinds every two weeks or so is something I can live without.
It brings the mind back to that episode of Seinfeld that made famous the phrase, "serenity now." More fitting would be the modification,"austerity now."
ADDENDUM:
Kevin Williamson checked in to send along a graphic illustration of $1 trillion. The upshot:
In case you can't see it, that's a standard-sized man in the bottom left-hand corner. (Check the link for an explanation.)
Hoochy Mama!
Posted by: David P at July 1, 2010 6:50 AMJustin, if you actually want to get your head about debts and deficits, try reading this link and looking at his tables and charts. If you would, report back here as to what conclusions you reach.
http://home.adelphi.edu/sbloch/deficits.html
Some highlights for those too lazy to read and research:
The first seven years of the G.W. Bush presidency increased the deficit by half again as much (150%) as the 32 years from JFK through G.H.W.Bush combined, and somewhat more than the 24 years from Harding through FDR combined (remember, this is in inflation-adjusted dollars).”
FDR had WWII as well as the Great Depression - and 12 years to rack up that moderate increase - which was paid off quickly afterwards.
There is hope. But it will not happen by putting the GOP back in power…...unless what gets done before then (health care, pulling out of wars, energy efficiency, stimulus, etc.) really kicks in.
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So, Justin and other righties, let's hear your summary of the facts and figures shown in those tables - about deficits and Presidents over the last 100 years. I am truly interested to see if we can come to even some base agreement.
Posted by: Stuart at July 1, 2010 9:22 AMStuart
The National debt more than tripled from 900 billion dollars to 2.8 trillion dollars during Ronald Reagan's tenure.
Thanks, Sammy - it might get confusing because the quote I posted are for the combined deficit - not the debt.
These are, of course, two different things. The way the guy who wrote that web page did it is pretty accurate......
Here is another simple chart. Again, our resident rightie hosts should notice what happened under ALL modern GOP Presidents.
GW did much worse than the chart shows, since the country is now pretty much a failed state and there is very little tax money coming in yet wars being fought, etc.
Posted by: Stuart at July 1, 2010 7:54 PMThe comparison I have always favored is this. A million dollars, in hundred dollar bills, makes a tack just over a foot tall. A billion dollars, stacked in hundred dollar bills, is taller than the Emoire State Building.
As for all the statements above. How we got here is interesting history, but I am not sure what guidance it offers as to a way out. I am sure that part of it is to suggest that "the way out" is to elect more Democrats, this basedon past history. This is a sophmoric view of history. The chief lesson of history is that "if things had not happened the way they did, does not mean they would not have happened at all". In short, a failure to have elected George Bush does not mean the deficit would not have increased.
Posted by: Warrington Faust at July 2, 2010 8:23 AMFaust, your comments does not make sense.
What you are saying, in effect, is that someone off the street just MIGHT be able to do brain surgery as well as the Harvard trained doctor. In other words, you are negating PAST EXPERIENCE.
Past experience is exactly how we learn. There is very little chance......that we would have the deficit we have now if Gore was elected and had a decent Congress (50/50 or more dem). The fact is that the Dems have been MUCH more fiscally responsible...which is what that chart says.
You have to suspend reality to come up with the statement that we don't have to measure possibilities using past experience. Maybe I should enter the US Open. I might win!
:-)
Anyone can talk a good game. What they actually do or try to do is more important.
Posted by: Stuart at July 2, 2010 8:57 AM