This is what you can learn by spending three hours going through Washington Inc’s books.The source for the following statistics is the Congressional Budget Office (CBO), with some (noted) opinion leader estimates.
I did this because word keeps seeping back across the Pond to Slogger’s Roost that some Gordon Brownesque debt accounting has been going on. Based on what I found, even if it hasn’t, America is bleeding to death. So if you’re squeamish about blood, look away now.
The official figure for the American national debt is $13.4 trillion. It has multiplied itself fourteen times since 1980, when it was just over $900 billion.
In case you think that was just inflation, in 1980, $900 billion was a third of American gdp. Today its over nine-tenths of gdp.
Some time during 2016, the amount the US pays out just in welfare (social security) will be more than the amount it collects in taxes – at today’s taxation levels.
To simply keep the welfare system at its current levels in 2020, the average US taxpayer’s burden would have to double.
“The problem is we’re seeing an explosion in spending,” says Andrew Moylan, director of government affairs for the American National Taxpayers Union, somewhat obviously.
It does make you wonder how any competent President with even halfway competent advisors could introduce a universal healthcare bill given that outlook.
Sadly, there’s worse to come. The CBO’s numbers do not count off-budget obligations such as required spending for Social Security and Medicare, whose programs represent a balloon payment for the Government as more Americans retire and collect benefits. Andrew Moylan says the real debt is around $60 trillion. David Walker – US Comptroller General from 1998 to 2008 – agrees with him at that ballpark level. (What they mean is debt liability – it’s the same as our Sir Humphrey problem in Whitehall).
In short, the total US national debt liability is nearly five times what the Fed says it is. (Similar accountancy jiggery-pokery hid the fact that ours in the UK was twice what Gordon of Ourdoom said it was).
At some stage after around 1995, the let-rip fever of US banking infected government (the Feds consist almost entirely of existing and former private bank directors) and started fifteen years of unbridled spending madness. Credit and notional derivative money was driving the world, there was limitless potential….and of course, the same must apply to the Feds too. So the Congress and Administrations of both Parties consistently overspent – and George W Bush’s was by far the worst in terms of both spend and creative ‘Enron’ accounting.
In September 2010, The United States of America is a gigantic Northern Rock. Or – if you will – Ireland multiplied many times over.
It faces the near-intractable problems of rising costs, spiralling debt management, stagnant gdp, and falling exports. A gigantic collapse in the domestic property market. And Asian competitors ahead of it on almost every dimension.
All of this happened because an eclectic Left to Right spectrum of deficit Democrats, crooked bankers, new paradigm snake-oil salesmen, shock and awers, greedy shareholders, bonus junkies, Friedmanite Republicans, credit-card marketeers, daft academics, and consumption-obsessed Yuppies just kept on saying, “Manana, manana”.
Manana has arrived. The US is on the operating table. It needs a heart transplant surgeon now. And then to get back to work the following week in a brand new job.
I don’t get the feeling that the Obama team has even thought about scrubbing up. I listen to Bernanke, and he sounds like a man resigned to the loss of his patient.
It really isn’t looking good.
The Slog 