The Debt of the United States*

Jim L. Riley, Ph.D

2002 Notation:

The following editorial was written in 1993. Despite recent tentative agreement between the White House and Congress regarding a plan to balance the budget by 2002 I believe my remarks remain valid. This may be verified by a recent statement of the Concord Coalition. It remains to be seen whether the "agreement" will produce what its proponents assert. Moreover, even granting the possibility of a balanced budget under the terms of the agreement, there is still much "smoke and mirrors" contained therein. This is particularly true with regard to the counting of receipts taken in through withholding for Social Security (FICA) as part of the federal government's general revenue.

It should also be noted that prognostications of budget surpluses may very well prove to be illusory, misleading and conducive to complacency as well as governmental profligacy.  While the current economic conditions (as of 2000) are generally favorable there needs now to be put in place long term plans for reduction in the debt, not merely balanced budgets. 

2007 Notation:

Some 14 years has passed since this editorial was written.  The situtation described therein is far more dire now than it was then.  David Walker, Comptroller General of the United States, is attempting to alert Americans as to the dangers we face as a nation.  A document he prepared entitled Saving our Future outlines what lies before us if no changes occur:  national bankruptcy!  As a nation and society we simply cannot sustain our existing system of spending beyond our means.  Moreover, the problems resulting from the retirement of the so-called "baby boom" generation -- those born during the period of 1946 - 1964; some 70+ million -- coupled with expansions of entitlement programs, particularly in the health care arena, become more unmanageable and catastrophic in their consequences as time passes with no effective action to bring government and private finances into the realm of fiscal responsibility.

2009 Notation:

As of this writing, the debut of the national government is in excess of twelve trillion dollars - $12,000,000,000,000 and growing by over a trillion in 2010.   Depending on which economic prognosticator one chooses, the projections are that by 2020 the national government (exclusive of all other governments and the private sector) will have incurred a debt equal or in excessive of the entire gross national product of the nation. 

    The impact this will have on interest rates, the value of the dollar and ultimately the vitality of the nation is fearful in the extreme.   If the current tragectory of deficit spending is not reversed, eventually the interest on the national debt would exceed the GDP.  Obviously this development would never be reached because as the event was a looming inevitabilty the entire financial, social, economic, political fabric of the nation would be torn asunder.

    Earlier this year the PBS program FRONTLINE: Ten Trillion and Counting was shown.  It is now available for viewing on line.  Go to:  <>   This cancer of debt on our nation is so critical to the future of our kids (and, yes, even grand kids and beyond)  that everyone not only should view the program but should also be willing to face up to the realities it poses.  Although the analysis presented within it is incomplete,  focusing primarily on the past decade or so, the results of our past profligacies are undeniable.
        This impending national disaster cannot be ignored without dereliction of our duty to pass our great nation to our progeny.  Ultimately it is the American public -- i.e., you, me and millions of others -- who are at fault for wanting a seemingly unlimited range of government programs and services but have been unwilling to pay for them.  We must stop spending the money of future generations!

        Mark the words of Thomas Jefferson: 

I sincerely believe... that the principle of spending money to be paid by posterity under the name of funding is but swindling futurity on a large scale." --Thomas Jefferson to John Taylor, 1816

"It is a wise rule and should be fundamental in a government disposed to cherish its credit and at the same time to restrain the use of it within the limits of its faculties, "never to borrow a dollar without laying a tax in the same instant for paying the interest annually and the principal within a given term; and to consider that tax as pledged to the creditors on the public faith." On such a pledge as this, sacredly observed, a government may always command, on a reasonable interest, all the lendable money of their citizens, while the necessity of an equivalent tax is a salutary warning to them and their constituents against oppressions, bankruptcy, and its inevitable consequence, revolution." --Thomas Jefferson to John Wayles Eppes, 1813

Fundamentally Americans must change their mindset as it pertains to spending within one's means.  Although I frankly doubt that this is achievable, without it the strong probability is that this nation will continue to lurch its way into a slowly developing state of  bankruptcy.  As but one first step in that direction we must demand that Congress adopt an inviolable PAYGO rule that compels every new spending or tax changes to not add to the federal deficit.  On a personal level, Americans must cease borrowing to finance personal pleasures. 

1993 Original Statement:

As I watch my two boys, ages six and eight, grow so rapidly while possessing that wonderful innocence and unconcern about the future, I am increasingly filled with a sense of deep frustration and anger at the unwillingness of our political leaders to do the right thing by them and the millions of other children. We as a nation are truly squandering their rightful inheritance by allowing our leaders -- both national and state -- to avoid acting on a simple truth: we are living beyond our means as a society and laying the debt upon our children. It is as if parents engage in a binge of free-wheeling extravagance and then pass the cost of such activities to their sons and daughters. There are simply many desirable programs and policies that cannot be afforded.  Much like a household may wish to have new cars, private college for the kids, first class vacations, top notch assisted living for the folks, a new finished basement and all the rest of such things, to get them by incurring huge debts is foolish..  For a government to provide desired programs for the present generation through deficit spending is dangerous fiscal policy and fundamentally immoral.  As Thomas Jefferson wrote:  "The principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale."  In a very real sense our national debt is child abuse at an colossal scale.

Recitation of the gigantic magnitude of the annual national deficits and cumulative debt can easily bring forth incredulity and a sense of hopelessness. Realization of the specific consequences for our children makes the scandal more meaningful. Servicing the governmental debt means that needed public services will be neglected. Education will suffer further. Roads, bridges, sewers will not be repaired. Capital for rebuilding our economic infrastructure will diminish. Jobs will shrink in quality and possibly in quantity. Political conflict will become even more vicious and strident than it is now. In short, the future will be not only less bountiful than at present, it will also be infected with a sense of despair, hostility and justified resentment toward this generation whose behavior is one of unforgivable irresponsibility.

Government leaders are paralyzed as they face the obvious solutions: cut spending, reduce entitlements and increase revenues. Democrats capitulate to the myriad of special interests shrieking their litany of need while Republicans rush to protect the property of the fortunate and well placed. Only a few of our elected officials have the valor to propose workable solutions and they either are ignored or forced out of office. "Don't look for any profiles in courage here," Dan Rostenkowski, legendary Chairman of the House Committee on Ways and Means, once said of Congress. How sad! How pathetic! How disgusting! How true! Using rhetorical flourishes, sound bites, media hype, huge donations from special interests, fiscal "smoke and mirrors," parliamentary slights of hand and a host of other escape devices, members of Congress have weaseled away from their fundamental responsibility: the promotion and nurturing of the national interests and general welfare. High officials in the executive branch are little better as demonstrated by their persistent unwillingness to propose a meaningful balanced budget and to accept the obvious need for established limits on entitlement spending.

When a more recent effort to impose fiscal responsibility on the national government through a balanced budget amendment was defeated, cheering and laughter echoed through the halls of Congress. Spokespersons for special interests and those consumed with their own personal and political future rejoiced in the defeat of a measure designed to do what should be done as a matter of common sense: spend within our means. Our children cannot understand fully the consequences that such greed will have on their lives but we can. We should be deeply ashamed that we have placed on the back of our progeny this monstrous national debt of five trillion dollars plus and billions upon billions more at the state level.

Just as the infamous demagogue Senator Joe McCarthy was once asked, "Have you no decency at long last," the same question can be posed to our present political leaders. "Can you not at long last place the interests of our children above your own personal and political interests?"  The general public and special interests must also answer whether they are willing at long last to give up some entitlements, some tax breaks, some subsidized activities, and some privileges in the name of responsibility to future generations.

Have our children any hope that we and our government officials will do the decent thing and begin an irreversible policy toward fiscal responsibility? Can the incessant clamor by special interests be resisted? Do we have the courage to adopt the painful policies essential to our nation's future? Little evidence supports the hope that this reformation is likely. Inaction, partisan posturing, myopic focus on constituency interests, unwillingness to compromise on important policies, scandal after scandal, self-serving perquisites, all these and more produce in me a growing sense of outrage and pessimism.

I am losing faith in our form of representative government. Our governing structures are failing in a multiplicity of arenas but the most obvious and significant are in the areas of the national deficits plus accumulated debt and insufficient attention to future generations of Americans. In an effort to protect existent special well organized interests, the public interest in fiscal responsibility has been neglected if not outright ignored.  Those who suggest that running a deficit for a short time to stimulate economic growth have a good point.  What is conveniently ignored is the corresponding truth that in times of robust economic activity, the accumulated debt should be systematically retired.  This was done for a time in the late 1990's but our profligate ways have resumed.

* Current Debt of the U.S.