How Do We Keep Falling Deeper In National Debt, And How Do We Get Out?

A caveat to personal finance blogging caught my eye today, GOVERNMENT finance blogging could be the next big thing, but more specifically the national debt.  This has always been something that has caught my eye and is just staggering what we’ve done to ourselves over the years, and more importantly, where we’re heading in the future.

Politicians are saying that we’ve got the national debt under control and are showing that we’re tackling the debt by showing a lower number to consumers; Consider the back patting that came from Washington at the close of fiscal 2007. The deficit for the unified budget was, politicians crowed, down to a simple $162.8 billion.Super, just 162.8 billion dollars, huh?  But politicians of both parties just use these good numbers to distract us from seeing the REAL numbers that we’re spending.

I don’t have a problem with the war, I think we’re doing some good over there, but this isn’t the blog for that.  However, we ARE hiding $$$ numbers that are directly impacted by it.  Democrats routinely criticize the Republican administration for crippling deficits, but they politely use the least-damaging figure, the $162.8 billion. Why? Because references to more-realistic accounting would reveal vastly greater numbers and implicate both parties.

national-debt.jpg

The Social Security Administration writes workers every year advising them that the program will have a problem 34 years from now. In fact, the real problem is already here. It will be a big-time problem in less than a decade.  Look at the numbers that we’ve seen just in this millenium, yea, it accounts for a piece of our 3.1% inflation number we use, which will increase if we keep on this, but at the same time we’re losing $ to other currencies which is dropping that number even more, which I guess can bring us full circle back from our caveat from personal finance because that is a key number to look at when we’re talking net worth –

Fiscal year Reported surplus/deficit Debt increase Debt at start of year Debt at year’s end
2000 $236.2 billion surplus $23.2 billion $5.606 trillion $5.629 trillion
2001 $128.2 billion surplus $141.2 billion $5.629 trillion $5.770 trillion
2002 $157.8 billion deficit $428.5 billion $5.770 trillion $6.198 trillion
2003 $377.6 billion deficit $561.6 billion $6.198 trillion $6.760 trillion
2004 $412.7 billion deficit $594.7 billion $6.760 trillion $7.355 trillion
2005 $318.3 billion deficit $550.6 billion $7.355 trillion $7.905 trillion
2006 $248.2 billion deficit $546.1 billion $7.905 trillion $8.451 trillion
2007 $162.8 billion deficit $497.1 billion $8.451 trillion $8.949 trillion

I don’t know all the answers, or what I’d do because I’m not a politician, nor an accountant but this is a pretty convincing graph showing what we’ve spent and where we’re heading.  Yes, we probably DO spend more each year over year, but it looks like we’re not worrying about the debt we’re facing now, but laying in on our kids to worry about for the future, and I’m not on board with that – it’s our mess, we need to clean it up.  How?  I’m not sure, but we need to start now before the snowball gets any bigger and rolls over all of us –

Filed Under: DebtUncategorized