(noon. – promoted by ek hornbeck)
Is good news one of those quaint relics, exclusively relegated to our past, fovever doomed to never again be a part of our present or future?
Is the sense that the course this nation is taking is analogous to that of an eighteen-wheeler, loaded with Class A Explosives, hurtling pell mell down a steep, treacherous series of hairpin turns, the accelerator stuck to the floor and the brakes inoperable, destined to crash in a hellish inferno merely a symptom of paranoia, or, worse yet, a fear that bears at least some basis in reality?
At the dawning of yet another Valentine’s Day, we are awakened by our morning coffee, along with an ominous headline, “US debt will keep growing even with recovery.”
When was it that you planned to retire? Consider the following excerpt from the above-referenced article…
Take Social Security, Medicare and other benefits. Add in interest payments on a national debt that now exceeds $12.3 trillion. It all will gobble up 80 percent of all federal revenues by 2020, government economists project.
That doesn’t leave room for much else. What’s left is the entire rest of the government, including military and homeland security spending, which has been protected and nurtured by the White House and Congress, regardless of the party in power.
The U.S. debt crisis also raises the question of how long the world’s leading power can remain its largest borrower.
The article, which is prominently featured in many headlines across the country this morning can be read in full here.
True to form, this MSM article includes the obligatory swipe at the Obama Administration and the Democrats, as suggested by the following brief paragraph, which suspiciously reeks with the rank, overpowering odor of a Fox News talking point…
Both the Obama administration and Democratic leaders have put job creation ahead of deficit reduction for now.
Again, the author of this article conveniently overlooks the matter of FDR following similar advice in 1937, reducing government spending, leading to a stalling of this nation’s recovery from the Great Depression.
Conveniently for the Republican Party, which long ago completely sold its collective soul to the rich and the powerful, the article fails to mention any responsibility for the considerable debt expansion that occurred under the watch of mostly Republican administrations. Granted, many, but not yet all Democrats have similarly succumbed to that same alluring, but treacherous siren call.
The purpose of this article is to provide a countervailing point of view. This writer would not even pretend to be an amateur economist, so those on this site who are far better informed could perhaps, by their sage comments, correct or at least improve upon that which follows.
The wikipedia article detailing our national debt can be found here.
An attenuated table, excerpted from the aforementioned wikipedia article follows, and should serve as a useful reference for the remainder of the article. Please keep in mind that the figures in the column “Gross Debt in Billions (undeflated)” appear to be unadjusted for inflation, which ran rampant in the 1970s. With that in mind, this writer would suggest that the figures appearing in the column entitled “As % of GDP” would be the most relevant for the discussion that follows.
Year Gross Debt in Billions (Undeflated) As % of GDP
1940 60.6 52.4
1950 256.8 94.0
1960 290.5 56.0
1970 380.9 37.6
1980 909.0 33.4
1990 3,206.3 55.9
2000 5,628.7 58.0
2001 5,769.9 57.4
2002 6,198.4 59.7
2003 6,760.0 62.6
2004 7,354.7 63.9
2005 7,905.3 64.6
2006 8,451.4 65.0
2007 8,950.7 65.6
2008 9,985.8 70.2
2009 12,311.4 86.1
2010 (est.) 14,456.3 98.1
2011 (est.) 15,673.9 101.0
2012 (est.) 16,565.7 100.6
2013 (est.) 17,440.2 99.7
2014 (est.) 18,350.0 99.8
In 1940, toward the end of the Great Depression, having financed the New Deal, consisting of massive public works projects, and two years prior to the advent of direct U. S. participation in World War II (defined as an overt declaration of war), the debt as a percentage of GDP was 52.4%.
By 1950, after an extremely expensive war, the Marshall Plan and the advent of the Cold War, the percentage soared to 94.0%.
By 1960, despite the expenses associated with the G. I. bill, the Korean Conflict, the Cold War and a Republican president occupying the White House for most of the decade, the percentage sank to 56%.
By 1970, despite the costs associated with the Vietnam Conflict, LBJ’s Great Society, strong unions, and an era where one bread winner could comfortably support a family, the percentage declined further to 37.6%.
By 1980, despite the costs associated with the Vietnam Conflict, soaring energy prices, rampant inflation and increased entitlements, the relevant percentage descended yet further to a low water mark of 33.4%.
Then, with his reassuring (to some), plain-spoken, grandfatherly delivery, Ronald Reagan ushered in a new era, casting aside concerns about the debt, borrowing from our future, proudly proclaiming that our nation was on the road to unprecedented prosperity.
The tide then began to shift, perhaps irreversibly.
At this point, we might do well to recall that oft-cited quote by Right Wing guru, Grover Norquist…
“I don’t want to abolish government. I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub.”
How might this be accomplished? One plausible strategy could be that of ballooning our national debt to the point that whatever remains of our ability to generate wealth will someday be almost exclusively dedicated to paying the interest on the debt, bestowing even further tax cuts upon the rich, aka most generous campaign donors (under the guise of creating jobs for the proletariat) and maintaining our nation’s military might. Social programs, including Social Security, Medicare, federal aid for education, the disabled and numerous other worthy programs would, under such formula, continue to shrivel. With this concept in mind, please consider the following numbers…
By 1990, after nearly a decade of Ronald Reagan and George H. W. Bush, the percentage in question rose from 33.4% to 55.9%.
At this point, since figures are listed annually after 2000, this writer will take the liberty of slightly extending this period to include 2001, under the premise that the deficit in 2001 would be more a reflection of the efforts of the Clinton Administration than that of Bush/Cheney. Over this eleven year period, the percentage in question rose slightly from 55.9% to 57.4%.
After eight more years of Bush/Cheney, the resurrection of massive tax cuts for the wealthy, initiating two exceedingly expensive wars on the other side of the globe, and the unprecedented expansion of Homeland Security, the relevant percentage rose from 57.4% to 86.1%.
The estimated figure for 2010, considering the economic stimulus, bailouts for Wall Street and increased defense spending, is estimated to rise even further to 98.1%, and then remain within a 2.5% range for the next four years, topping out at 101% in 2011. We are faced with soon approaching that dreaded threshold of a debt equaling 100% of GDP, thought by many to represent a fatal third wire.
When and if this time arrives, will other nations continue to lend us money? Why should they? What will we do? Print more money? What will that money be worth, once shifts in the relative strengths of various currencies are taken into account, remembering that almost nothing (except for armaments) is manufactured here anymore? By now, much of our food, even that which can be grown domestically, is now imported from other countries. Will producers in other nations be willing to accept the equivalent of Monopoly money as payment for their labors?
If one allows their imagination to roam even slightly, the result can easily ignite the equivalent of a nightmare, the worst kind, where there is no awakening, and that welcome, gradually emerging realization that it was merely a bad dream. Most of us can immerse ourselves for brief periods of time in such a toxic atmosphere, soon overcome by a desperate need to divert our attention, lest we fall into a bottomless pit of despondency.
Perhaps this writer’s weekly articles on Docudharma, the Original v. Cover series, represents yet another backward looking excursion to happier memories from earlier times. Could it be that a similar motivation underlies some of the other wonderful diversionary diaries that grace this site?
As always, all questions and comments are welcomed, and in the process, hopefully we will all become better enlightened in the process.