October 4, 2008


$10.1-trillion national debt? Let's cut taxes!
: Even when trying to save the economy, Congress can't resist its pork addiction. (David Lazarus, October 5, 2008, LA Times)

"The national debt is like a fat guy in a small boat," said Robert E. Wright, an economics professor at New York University and author of "One Nation Under Debt: Hamilton, Jefferson and the History of What We Owe."

"The more debt you load on, the closer to the water line you get. Pretty soon, it takes only a small wave to sink you."

Thanks to the bailout bill approved by the House and Senate last week, the nation's borrowing limit has been raised to $11.3 trillion from $10.6 trillion. As of Friday, the national debt stood at $10.1 trillion -- about $33,500 owed by every man, woman and child.

To put some perspective on how out of control our borrowing has become, it took the country about 200 years to run up its first trillion dollars in debt. Then President Reagan took office in 1981 and the national debt started to soar, quadrupling to $4 trillion by the time the first President Bush exited the White House.

Under President Clinton, the national debt grew to $5.7 trillion, and has since nearly doubled on Bush Jr.'s watch.

Put another way, the country's debt load represented just a third of gross domestic product when Reagan arrived in Washington. By the time Bush gallops back to Texas in January, our debt will represent about 70% of the overall economy.

That is certainly another way of looking at it, but, then again, here's another: over the past thirty years the United States has defeated Communism and Islamicism and has a national debt to GDP ratio of about 70%. By comparison, after defeating Nazism that ratio was over 120% and by the time the Brits defeated Napoleon theirs was at 300%. Given the dominance of the American and British Empires in the wake of those numbers, it is possible to argue against the debt as a "moral" issue, just not as an economic or geo-political one.

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Posted by Orrin Judd at October 4, 2008 8:57 AM
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