“LET’S GET REAL ABOUT OUR NATIONAL DEBT”

SUMMARY OF THIS REPORT

National Debt

Basically, our national debt is the amount of money our country owes. When Obama took office, our National Debt was $10.6 Trillion.  Today it is $14.3 Trillion. This $3.7 Trillion increase is 2 ½ times the annual increase under President Bush.

When the Democrats took control of Congress on January 4, 2007, the National Debt was $8.7 Trillion.   When the Republicans regained control of the House on Jan. 5, 2011, the National Debt was $14.0 Trillion; therefore, the national debt grew by $5.3 Trillion under the Democrat-controlled Congress.

Deficit 

The deficit is the difference between what the U. S. government takes in from taxes and revenues and the amount that the federal government spends during one fiscal year.  When deficits accumulate, the national debt increases.

Instead of focusing on budget deficits, we should be focusing on the National Debt.  If the National Debt were to go up in a particular fiscal year, that means the government ran a deficit.  If the National Debt were to go down in a certain fiscal year, the government has run a surplus and has paid down the debt.

The United States does not have a revenue problem; it has a spending problem. 

Congressmen should vote “no” on raising the debt ceiling.

Let’s Get Real About Our National Debt

 by Henry W. Burke

7.05.11

 INTRODUCTION

Our economy is in serious trouble; we have a debt crisis!  Federal overspending has reached new levels in recent years.  We racked up more national debt in the last 10 years than we accumulated in the first 225 years of our country!  The national debt is unbelievably high and is set to explode in the coming decades. We are in uncharted territory with our record deficits and debt.

Both Standard & Poor’s and Moody’s have threatened to downgrade the United States ‘ prized AAA credit rating unless the Obama administration and Congress slash the yawning federal deficits.  Even the International Monetary Fund (IMF) has warned that the United States must reduce its debt or face serious economic consequences.

Our economy is heading toward a complete financial collapse.

Our elected officials in Washington (and the whole country for that matter) are focused on our national debt and deficits.  Right now most of the attention is on the debt ceiling.

We recently surpassed the debt limit (debt ceiling) of $14.3 Trillion and Treasury Secretary Timothy Geithner has stated that we have until August 2, 2011 to raise it or the country will default on its debts.

Congress must make some serious decisions, but it cannot do so unless the Congressmen have the correct facts.  Our elected officials must analyze the history of our national debt and our increasing deficits before they can predict the future with any type of accuracy.

Our elected leaders utilize many sources for information; but, unfortunately, they tend to rely too heavily on the Congressional Budget Office (CBO) for much of the guidance.

The Congressional Budget Office stated in the October 2010 Monthly Budget Review:

CBO estimates that the federal budget deficit was slightly less than $1.3 trillion in fiscal year 2010 and $125 billion less than the shortfall recorded in 2009.   The 2010 deficit was the second-highest shortfall—and 2009 the highest—since 1945, relative to the size of the economy.

Is this $1.3 Trillion deficit for fiscal year 2010 (FY 2010) correct?  Let’s start with the basics.

THE U.S TREASURY PROVIDES THE CORRECT FIGURES

The U.S. Treasury / Treasury Direct website provides these definitions of deficits and national debt:

The deficit is the fiscal year difference between what the United States Government (Government) takes in from taxes and other revenues, called receipts, and the amount of money the Government spends, called outlays. The items included in the deficit are considered either on-budget or off-budget.

You can think of the total debt as accumulated deficits plus accumulated off-budget surpluses.

The U.S. Treasury website provides the official national debt figures for any date in question.  The Total Public Debt Outstanding (national debt) is comprised of two major components: Debt Held by the Public and Intragovernmental Holdings.  When you enter a date (in this case, the current date of 6.30.11) on this website, you obtain the following: http://www.treasurydirect.gov/NP/NPGateway

 Treasury Direct 

The Debt to the Penny and Who Holds It Debt Held by the Public vs. Intragovernmental Holdings )

Date

Debt Held by the Public

Intragovernmental Holdings

Total Public Debt Outstanding

06/30/2011

9,742,223,364,846.58

4,600,864,275,161.82

14,343,087,640,008.40

 

The current national debt (Total Public Debt Outstanding) on 6.30.11 is $14.343 Trillion.  For this date, the Debt Held by the Public is $9.742 Trillion and Intragovernmental Holdings is $4.601 Trillion. [$9.742 Trillion + $4.601 Trillion = $14.343 Trillion]

Federal fiscal years end on September 30 and are identified by the calendar year in which they end.  For example, Fiscal Year 2010 (FY 2010) ended on 9.30.10.  We are now in Fiscal Year 2011.

According to the U.S Treasury website, the National Debt on 9.30.10 was $13.562 Trillion; the National Debt on 9.30.09 was $11.910 Trillion.  This tells us that the National Debt grew by $1.652 Trillion. [$13.562 Trillion – $11.910 Trillion = $1.652 Trillion]  Therefore, the real deficit for fiscal year 2010 (FY 2010) was $1.65 Trillion not $1.3 Trillion!

http://www.treasurydirect.gov/NP/NPGateway

Treasury Direct 

Date

Debt Held by the Public

Intragovernmental Holdings

Total Public Debt Outstanding

09/30/2009

7,551,861,558,736.77

4,357,967,444,774.98

11,909,829,003,511.75

 

Date

Debt Held by the Public

Intragovernmental Holdings

Total Public Debt Outstanding

09/30/2010

9,022,808,423,453.08

4,538,814,607,438.71

13,561,623,030,891.79

 

It is not that complicated; you don’t need to depend on the CBO for national debt and deficit numbers.  Go to the U.S. Treasury website and obtain the national debt figures (Total Public Debt Outstanding) for two successive years (September 30).  The growth of the national debt is obtained by subtracting the former year from the next year.  This growth of the national debt is the deficit for that fiscal year!

I performed these calculations for FY 1999 to FY 2010 and entered them in a Table, Real National Debt and Deficit.  I have also included a Table taken directly from the CBO,Congressional Budget Office — Table E-1.  These Tables appear at the end of this paper under “Tables.”

 THE CBO FIGURES ARE INCORRECT

How can you explain the discrepancy between my calculated deficit of $1.65 Trillion and the CBO’s estimate of $1.3 Trillion for fiscal year 2010?  The answer lies in the definition of “National Debt.”

The Congressional Budget Office (CBO), The White House, and the Office of Management and Budget (OMB) consistently use “Debt Held by the Public” instead of “Total Public Debt Outstanding” when they are discussing the national debt.  Accordingly, they report the FY 2010 Debt at $9.018 Trillion, the On-Budget Deficit at $1.371 Trillion, and the Off-Budget Deficit at $77 Billion.

The CBO consistently uses Debt Held by the Public to represent National Debt.  For example, the CBO released a major report in June 2011, “CBO’s 2011 Long-Term Budget Outlook.”   The report stated:

Recently, the federal government has been recording budget deficits that are the largest as a share of the economy since 1945. Consequently, the amount of federal debt held by the public has surged. At the end of 2008, that debt equaled 40 percent of the nation’s annual economic output (a little above the 40-year average of 37 percent). Since then, the figure has shot upward: By the end of this year, the Congressional Budget Office (CBO) projects, federal debt will reach roughly 70 percent of gross domestic product (GDP)—the highest percentage since shortly after World War II.

The CBO figures dramatically differ from the accurately reported national debt and deficit figures.  Most responsible sources consider the CBO debt figures to be erroneous and instead are stating that our current national debt is roughly $14.3 Trillion (not CBO’s erroneous figure of $9.7 Trillion).

Now we see why it is important not to depend upon the CBO for the national debt figure.  The CBO is off by $4.6 Trillion!

There is a “disconnect” with some elected officials, economists, and media people.  They talk about a $14 Trillion national debt but then they cite a $1.3 Trillion deficit for 2010.  This isinconsistent!  Their debt figure is correct while their deficit is based on the wrong debt numbers.

Politicians typically prefer to talk about the Debt Held by the Public because it is a much smaller number than the Total Public Debt Outstanding.  It is not fiscally responsible to exclude arbitrarily the Intragovernmental Holdings from the total debt burden.  (Intragovernmental Holdings are needed to repay funds taken from the Social Security trust fund.)

KEEPING THE TERMS STRAIGHT

Many people get confused between “deficits” and “debt.”  Perhaps this analogy will help to keep the terms straight.  Suppose you bought your home a few years ago with a fixed-interest mortgage.  Your monthly payments (principal portion only) are $1,000 per month.  It is December, and you now owe $50,000 in principal on your mortgage.

You take out a three-month loan of $2,000 against your mortgage in December to pay for some unplanned expenses.  You continue making your $1,000 mortgage payments, but you cannot repay the $2,000 loan in March when it comes due.  We could say that you have a $2,000 “deficit” in 2012 on your home loan.  This deficit of $2,000 will be added to your principal balance at that time.  If you owe $47,000 in March, the $2,000 “deficit” will be added to the $47,000 to equal a total “debt” of $49,000.

It works the same way with the federal government.  If it incurs a $1.5 Trillion deficit this year, that $1.5 Trillion will be added to the debt for this year.

At the risk of overusing this analogy, let’s extend it to discuss “Debt Held by the Public” and “Total Public Debt Outstanding.”  Let’s say that your $50,000 home mortgage is analogous to “Debt Held by the Public.”  You borrow $10,000 against your mortgage to loan to your son (“Intragovernmental Holdings”).  Your mortgage principal amount is now $60,000 (“Total Public Debt Outstanding”).  You cannot say that you only owe $50,000 when we know that you really owe $60,000.

With the federal government, the U.S. Treasury expresses the national debt in three major categories.  To get the complete picture, the Treasury Department adds “Debt Held by the Public” with “Intragovernmental Holdings” to get “Total Public Debt Outstanding.”  The Total is the National Debt.

When you personally spend more than you make, you get into trouble.  It is no different on the federal level.  The federal government’s appetite for overspending has placed it in a horrible position.  Like they say, “When you have dug yourself into a hole of debt, STOP DIGGING!”

DO NOT RELY ON THE CONGRESSIONAL BUDGET OFFICE

Many people rely too heavily on the accuracy of CBO estimates.  The CBO simply makes its calculations based on the input provided (“Garbage-In-Garbage-Out”).  In many cases, the CBO is required to calculate its cost numbers while wearing handcuffs.  Because the CBO must follow certain rules when it “scores” proposed federal legislation, its estimates are not as independent as you might think.

When the healthcare measure was being considered, the Congressional Budget Office was asked to score the bill.  Constrained by the assumptions, the CBO issued a report that statedObamacare would cut the deficit over ten years.  However, the healthcare bill contains a number of budget gimmicks.  These include double counting for Medicare cuts, CLASS Program, and Social Security payroll taxes.  Also, the measure includes an unpaid-for “Doc Fix” and discretionary spending.  When you account for these budget gimmicks, Obamacare actually adds to the deficit.

CBO Director Douglas Elmendorf wrote this about Obamacare: “Current law now includes a number of policies that might be difficult to sustain over a long period of time.”  Medicare’s Chief Actuary echoed this concern in his own analysis.  If Medicare savings do not materialize, new spending under the healthcare bill will add to the budget deficit.

The CBO must use the assumptions even when they are unrealistic or devious.  Another case in point is Obama’s 2012 budget, a budget loaded with budgetary gimmicks.  One reliable estimate places the gimmick total at $2 Trillion.  [Don’t expect the CBO to criticize the budget.]

In most of its reports, the CBO focuses on Debt Held by the Public for various years.  There is another problem.  Instead of stating a dollar figure for the debt in future years, the CBO expresses the debt as a percentage of the Gross Domestic Product (GDP).  This may be interesting but people need to know the dollar amounts.

GROWTH OF THE NATIONAL DEBT

How did we get here with this huge national debt?

The U.S Treasury website lists the historical Public Debt Outstanding (National Debt) from 1791 to the present.  The first listing (January 1, 1791) shows a National Debt of $75.4 Million.  The first $1 Billion Debt occurred in 1863 during the Civil War.

In 1900, the National Debt stood at $2 Billion.  By 1946, after World Wars I and II, the National Debt had grown to $269 Billion.  The Debt was $271 Billion in 1954 (after the Korean War) and $620 Billion in 1976 (after the Vietnam War).

The first $1 Trillion Debt occurred in 1982 during Ronald Reagan’s first term.  [Before October 1, 2001, the Treasury figures are available only for the fiscal year beginning October 1; after October 2001, the Debt figures are available monthly.]  The National Debt grew by $1.9 Trillion during Reagan’s 8-year term ($1.0 Trillion to $2.9 Trillion from October 1981-1989).

The Debt increased by $1.5 Trillion under George H.W. Bush ($2.9 Trillion to $4.4 Trillion from October 1989-1993).  The Debt grew by $1.3 Trillion under Bill Clinton ($4.4 Trillion to $5.7 Trillion from October 1993-January 2001).

On January 1, 2000, the national debt stood at $5.8 Trillion.

The National Debt grew by $4.9 Trillion in the eight years George W. Bush was president ($5.7 Trillion to $10.6 Trillion from January 2001-2009).  If you divide $4.9 Trillion by 8 years, you get about $600 Billion per year.

When Obama took office, the National Debt was $10.6 Trillion; it is $14.3 Trillion today. Therefore, the National Debt has increased by $3.7 Trillion in the 29 months Obama has been in office ($1.5 Trillion increase per year).  This is two and one-half times the annual increase under Bush.

Over the course of our nation’s history, there have been several times when we developed asurplus and made huge strides in paying down our National Debt.  Between 1823 and 1836, we reduced our Debt from $93.5 Million to $33,733!  From 1920 to 1931 (the Roaring Twenties), we trimmed our National Debt from $27.4 Billion to $16.8 Billion.

We even made a slight reduction ($16.6 Billion) in our National Debt after World War II (from 1946 to 1949).  The U.S. can operate on a balanced budget, but we have not shown much will to do so in recent years.

It took 192 years (from 1790-1982) for the National Debt to grow from zero to $1 Trillion.  It more than doubled under Ronald Reagan, increased somewhat under George H.W. Bush and Bill Clinton, and almost doubled under George W. Bush.  The Debt is projected to double again under Barack Obama.

Federal overspending has reached new levels in recent years.  Ten years ago (on 6.30.01), our national debt stood at $5.7 Trillion.  Today it is $14.3 Trillion.  This means we racked up more national debt in the last 10 years than we accumulated in the first 225 years of our country’s history (since 1776).  [$14.3 Trillion – $5.7 Trillion = $8.6 Trillion]

People like to forget who was in control when certain things happened.  On January 4, 2007, Democrats regained control of Congress.  The National Debt stood at $8.7 Trillion on that day; thus the National Debt grew by $1.9 Trillion in the two years Democrats were in control of Congress.   [$10.6 Trillion – $8.7 Trillion = $1.9 Trillion]

After the Republican victory in the 2010 mid-term elections, Republicans regained control of the House on January 5, 2011.  The national debt was $14.0 Trillion on that day.  This means the debt grew by $5.3 Trillion under a Democrat-controlled Congress.  [$14.0 Trillion – $8.7 Trillion = $5.3 Trillion]

We should concede that both Republicans and Democrats have added to the National Debt.  It is imperative that we strive to cut spending and move toward a balanced budget.

RECENT HISTORY OF OUR DEFICITS

There is much misinformation about the condition of our country when Obama took office on January 20, 2009.

In the last several months of George W. Bush’s presidency and with a Democrat-controlled Congress, the $700 Billion TARP was passed.  However, TARP was a loan and not a grant, and about $600 Billion of that has already been repaid.  (A recent CBO report places the total cost of TARP at $66 Billion.)  That left a $100 Billion deficit from TARP plus the $600 Billion deficit from Bush, for a total of $700 Billion.

Therefore, when Obama walked in the door, our country effectively had a $700 Billion deficit.

The Total Public Debt Outstanding was $10.6 Trillion when Obama took office on January 20, 2009.  Today the Total Public Debt Outstanding stands at $14.3 Trillion.  This means the National Debt has increased by $3.7 Trillion in the 29 months Obama has been in office.   [$14.3 Trillion – $10.6 Trillion = $3.7 Trillion]

We should focus on the National Debt and the yearly changes in the Debt rather than the annual budget Deficits.  If the National Debt went up in a particular year, the government ran a deficit.  If the National Debt went down in a certain year, the government ran a surplus and paid down the Debt.  It is just that simple.

THE REST OF THE STORY

According to the CBO, the Debt Held by the Public is headed toward $18 Trillion by 2020.  Then, the Total Public Debt Outstanding would be about $27 Trillion by 2020!

As bad as this is, it gets even worse.  The long-term excess costs from entitlement programs like Social Security and Medicare are $46 Trillion.  Along with other commitments, the total obligations of the U.S. Government add up to a mind-boggling $63 Trillion!

This translates to $200,000 for every American!

It is this burgeoning national debt that threatens to destroy our country’s economic stability in the near future.

RAISING THE NATIONAL DEBT LIMIT

We recently surpassed the debt limit (debt ceiling) of $14.3 Trillion and Tim Geithner stated that we have until August 2, 2011 to raise it or the country will default on its debts.  Let’s look at a brief history of the debt limit.

Congress first placed a statutory limit on total federal debt in 1917, in the Second Liberty Bond Act. Since 1962, Congress has altered the debt limit through 74 separate measures, raising it 10 times since 2001.  Since 1990, the debt limit has been raised a total of $10.1 Trillion, but nearly half of that increase has occurred since September 2007.

The Debt Limit was raised $2.6 Trillion between 2007 and 2009; the limit was increased $5.95 Trillion between 1997 and 2002.

Congress apparently recognized the real national debt figure ($12.3 Trillion on 1.20.10) becauseit voted to increase the national debt limit from $12.4 Trillion to $14.3 Trillion in January 2010.  On 1.28.10, all 60 of the Senate Democrats agreed to raise the legal limit on government borrowing by $1.9 Trillion, increasing the national debt limit to an unbelievable $14.3 Trillion!

All Republicans voted against the increase.  That $1.9 Trillion increase was large enough to allow the Democrats to spend freely in an election year without having to raise the limit on the federal credit card again.

A budget deficit of $1.65 Trillion is the second highest budget deficit since World War II.  Thehighest deficit was $1.9 Trillion in 2009 (it was $1.55 Trillion in 2009 according to the CBO).  Measured in constant dollars, these are the largest deficits in American history.  Obama’s team expects a $1.5 Trillion deficit this year.  (The real deficit will be about $1.8 Trillion.)

Let’s pose some obvious questions.  If the national debt was really $7.8 Trillion on 1.20.10 (as given by Debt Held by the Public), why did Congress raise the national debt limit to $14.3 Trillion on 1.28.10?  If the current national debt is only $9.7 Trillion today (as defined by Debt Held by the Public), why is so much attention being focused on raising the debt ceiling above $14.3 Trillion?

Clearly the national debt is described by Total Public Debt Outstanding not Debt Held by the Public.

COMPARING THE DEFICIT AND DEBT WITH THE GDP

People invariably compare the deficit and the national debt to the GDP.  According to the Bureau of Economic Analysis (in its 6.24.11 report), the Gross Domestic Product (GDP) for the first quarter of 2011 was $15.018 Trillion.  A deficit of $1.65 Trillion is roughly 11 % of GDP ($1.65 Trillion / $15.02 Trillion = 11.0 %).

http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm

How does the national debt compare to the GDP?  The current national debt of $14.34 Trillion is about 95 % of our GDP.  [$14.34 Trillion / $15.02 Trillion = 95.5 %]

By comparison, America ’s debt-to-GDP ratio peaked at 109 % at the end of World War II, while the ratio for economically troubled Greece hit 115% in 2009.  When a country hits 100 %, it is highly problematic. [We are nearly there.]

Many elected officials like to use the lower national debt figure of $9.7 Trillion (Debt Held by the Public).  Thereby, the debt-to-GDP ratio is only 65 % today.  [$9.74 Trillion / $15.02 Trillion = 64.8 %]  Our country is in a precarious position with our mounting debt and the lower percentage hides this important fact.

Why would politicians, reporters, economists, and the Congressional Budget Office (CBO) compare the government’s debt to the GDP?  This comparison to the Gross Domestic Product makes the debt look smaller and more manageable than it really is.

The government does not pay its debt with GDP; it pays it with taxes.  Total Revenue (taxes) for 2011 is estimated at $2.2 Trillion; Total Outlays are projected at $3.8 Trillion.  When you spend $1.6 Trillion more than you take in, it is quite likely that you might experience a deficit.  [Please smile.]

http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/hist04z1.xls

The United States does not have a revenue problem; it has a spending problem. 

BUDGET CHICANERY 

There is too much budget chicanery taking place to get an accurate picture from the White House, OMB (Office of Management and Budget) or CBO (Congressional Budget Office).  Deficits do not tell the full story.  A few examples of budget chicanery will illustrate the point.

Congress or the White House might declare that this budget shows a “reduction” or a“savings.”  What they really mean is that the spending levels are lower than earlier “projections.”  [Guess who made the earlier projections?]

Politicians routinely paint a rosy picture by inflating the revenue estimates and shrinking the estimated expenses.  Also they will estimate an expanding GDP while assuming very low interest rates.  You cannot have it both ways – a strengthening economy with falling interest rates.

Another ploy is shifting items from one place to another on the government’s books.  Some accounts are declared “off-budget” items because they were removed from the budget or created outside the budget.  Off-budget items do not count in the federal budget totals.  Examples include Social Security and the U.S. Postal Service.  (Twenty years ago, the Persian Gulf War was an off-budget item.)

The biggest ruse is the raiding of the Social Security Trust Fund.  Congress and the administration take real dollars out of the trust fund and replace them with specially created, nonmarketable Treasury bonds (government IOU’s).  These raided funds appear as Intragovernmental Holdings (now standing at $4.6 Trillion).  The budget masters in Congress do the same thing with the other federal trust funds (military, railroad, postal workers, and civil service retirement).

For the above reasons, we should focus on the National Debt and the yearly changes in the Debt rather than the annual budget Deficits.  Do not listen to the statements issued by the politicians and bureaucrats.  Check and verify the accuracy of the figures.

INTEREST ON THE NATIONAL DEBT

With people’s personal finances, they must pay interest on the total amount owed (e.g., home mortgage principal).   The same thing applies to the federal government; it must pay interest on the total amount owed (the national debt).

Because current interest rates are so low, interest payments on the National Debt are relatively small.  Even with low interest rates, the interest expense is quite significant.  In 2010, the U.S. spent more on interest on the national debt than it spent on many federal programs.   Last year, the interest expense of $414 Billion was more than the combined total of three major departments (Labor @ $173 Billion + Agriculture @ $130 Billion + Education @ $93 Billion = $396 Billion).

http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/hist02z1.xls

When interest rates increase, the taxpayer cost will be enormous!  If interest rates double, which they easily could, our ability to service our debt would be severely tested.  It is a statutory requirement that the government must make the annual interest payments on the National Debt; it has no choice.

The CBO projects that, under Obama’s present budget, soaring debt and rising interest rates will push the net annual interest cost to $774 Billion by 2021.  Several projections peg the annualinterest payments at over $1 Trillion by 2021!

THE DEBT AND NATIONAL SECURITY

The astronomical National Debt has national security implications.  On 9.8.10, Secretary of State Hillary Clinton declared:

I think that our rising debt level poses a national security threat and it poses a national security threat in two ways: it undermines our capacity to act in our own interests and it does constrain us where constraint may be undesirable.  And it also sends a message of weakness, internationally.

By calling the debt level a national security threat, Hillary Clinton can take up a subject not usually appropriate for a Secretary of State.

The interest on the National Debt will exceed the annual national security budget in several years.  The 2010 outlay was $667 Billion for the Department of Defense and $44 Billion for the Department of Homeland Security (a combined total of $711 Billion).  When interest rates increase, annual interest payments on the National Debt could easily climb to $800 Billion or even $1 Trillion!

The inevitable cutbacks in defense and homeland security could jeopardize our national security.

A SOLUTION FOR OUR NATIONAL DEBT PROBLEM 

It does little good to point out problems unless you can offer some solutions.

On 6.29.11, Heritage Action for America (The Heritage Foundation)

http://blog.heritage.org/2011/06/30/morning-bell-time-for-congress-to-lead-on-the-debt-ceiling/

announced it would ask Members of Congress to vote ‘no’ on raising the debt ceiling–unless, that is, a deal ‘rises to the level of the substantial fiscal challenges which face our nation.’

The Heritage Foundation has previously laid out exactly what an acceptable package might look like. It must: 1) significantly cut current spending; 2) restrict future spending; and 3) fix the budget process. Heritage Action for America notes that only one plan currently being debated meets this test, and that is the plan embodied in the ‘Cut, Cap and Balance Pledge.’ Heritage Action goes on to say: ‘This is an example of a plan that matches the historical moment that we currently face as a nation.’

The Heritage Foundation has developed a complete plan to solve our debt crisis.  It is entitled “Saving the Dream: The Heritage Plan to Fix the Debt, Cut Spending and Restore Prosperity.”  Details of the plan can be found at this link:

http://savingthedream.org/about-the-plan/plan-details/SavAmerDream.pdf

CONCLUSION 

The National Debt on 9.30.10 was $13.562 Trillion.

The National Debt on 9.30.09 was $11.910 Trillion.

This tells us that the National Debt grew by $1.652 Trillion in FY 2010 [$13.562 Trillion – $11.910 Trillion = $1.652 Trillion].

The real deficit for Fiscal Year 2010 was $1.65 Trillion not $1.3 Trillion, as reported by the Obama White House and the CBO!

The current National Debt (on 6.30.11) is $14.343 Trillion.

The National Debt was $13.6 Trillion at the end of Fiscal Year 2010 (FY 2010); the National Debt is $14.3 Trillion today.

Thus, the National Debt has grown by $0.781 Trillion ($781 Billion) since 9.30.10.

When you see or hear statements about our national debt and deficit, check them against reality.  Do not assume those statements are correct.

The United States does not have a revenue problem; it has a spending problem. 

Congressmen should vote “no” on raising the debt ceiling.

Instead, Congressmen should sign the “Cut, Cap and Balance Pledge” and work to implement this solution to our debt and spending problem.  This plan will: (1) significantly cut current spending, (2) restrict future spending, and (3) fix the budget process with a balanced budget proposal.

TABLES 

For many people, the Deficit and National Debt figures are more readily visualized in tabular form.

Starting with the national debt figures for the end of each fiscal year (September 30), I performed the annual deficit calculations for FY 1999 to FY 2010 then entered them in the following Table, Real National Debt and Deficit.

The first Table, Real National Debt and Deficit, shows the national debt, real deficit, and CBO deficit.  The national debt figures were obtained directly from the U.S. Treasury website; the Real Deficit was calculated by subtracting the national debt for the two adjacent years; the CBO Deficit was taken from the CBO’s Table E-1 (shown below).

Real National Debt and Deficit (6.30.11)

(All Figures in Trillions of Dollars)

 

Date Total Public Debt

Outstanding

Real Deficit CBO Deficit Fiscal Year
9.30.99    5.656      
9.30.00    5.674    0.018 + 0.086   2000
9.30.01    5.807    0.133    0.032   2001
9.30.02    6.228    0.421    0.317   2002
9.30.03    6.783    0.555    0.538   2003
9.30.04    7.379    0.596    0.568   2004
9.30.05    7.933    0.554    0.494   2005
9.30.06    8.507    0.574    0.435   2006
9.30.07    9.008    0.501    0.342   2007
9.30.08  10.025    1.017    0.642   2008
9.30.09  11.910    1.885    1.550   2009
9.30.10  13.562    1.652    1.371   2010
6.30.11*  14.343    0.781    0.929   2011

 

http://www.treasurydirect.gov/NP/NPGateway

Sources:  U.S. Treasury / Treasury Direct; CBO and OMB

Note:  * Approx. 9 months of Fiscal Year 2011

The second Table, Congressional Budget Office — Table E-1, was taken directly from the CBO website.  (I converted it from an Excel spreadsheet to a Word Table.)  The CBO’s Table was shortened somewhat by omitting years 1971 to 1999.  This Table makes it very clear that the CBO uses Debt Held by the Public to represent our national debt.  This is a distortion of reality.

Congressional Budget Office — Table E-1

(All Figures in Billions of Dollars)

Table E-1.                        
Revenues, Outlays, Deficits, Surpluses, and Debt Held by the Public, 1971 to 2010, in Billions of Dollars
                         
                         
         

Deficit (-) or Surplus

 
         

Social

Postal

    Debt Held
Year Revenue

Outlays

On-Budget

Security

Service

Total

by the Public
 

 

 

 

 

 

 

 

  Note 1  

 

 

 

 

 

                 

       
2000

2,025.2

 

1,789.0

 

86.4

 

151.8

 

-2.0

 

236.2

 

3,409.8

2001

1,991.1

 

1,862.8

 

-32.4

 

163.0

 

-2.3

 

128.2

 

3,319.6

2002

1,853.1

 

2,010.9

 

-317.4

 

159.0

 

0.7

 

-157.8

 

3,540.4

2003

1,782.3

 

2,159.9

 

-538.4

 

155.6

 

5.2

 

-377.6

 

3,913.4

2004

1,880.1

 

2,292.8

 

-568.0

 

151.1

 

4.1

 

-412.7

 

4,295.5

2005

2,153.6

 

2,472.0

 

-493.6

 

173.5

 

1.8

 

-318.3

 

4,592.2

2006

2,406.9

 

2,655.1

 

-434.5

 

185.2

 

1.1

 

-248.2

 

4,829.0

2007

2,568.0

 

2,728.7

 

-342.2

 

186.5

 

-5.1

 

-160.7

 

5,035.1

2008

2,524.0

 

2,982.5

 

-641.8

 

185.7

 

-2.4

 

-458.6

 

5,803.1

2009

2,105.0

 

3,517.7

 

-1,549.7

 

137.3

 

-0.3

 

-1,412.7

 

7,544.7

                 

       
2010

2,161.7

 

3,455.8

 

-1,371.1

 

81.7

 

-4.7

 

-1,294.1

 

9,017.8

                           
                                                 

 

http://www.cbo.gov/ftpdocs/120xx/doc12039/HistoricalTables[1].xls

Source:  “January 2011 Budget and Economic Outlook: Historical Budget Data 1,” Congressional Budget Office; Office of Management and Budget.

 Notes: 

1.  The years 1971 to 1999 were deleted from the Table.

2.  Minor formatting changes were made to the Table; all data remains unchanged.

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About Alice Linahan

Alice Linahan is a Conservative, politically-active Texas Mom who has worked hard in the trenches of the Tea Party movement. As an active Real Estate blogger turned online newspaper owner, Alice launched Resolute Media Group along with two partners. It quickly grew into playing an integral part in holding politicians and the progressive/liberal media accountable by getting real stories out to Americans across the country using social media integration and Resolute Media’s “North Texas Navigator”. Now Alice has launched Voices to Action Consulting. Alice is working hard to train boots on the ground activists using social media techniques to get accurate information out to the passive majority of Americans. In addition she is working on projects at both the state and national level to save our Country from attacks from within our own borders. In addition I am currently on the Advisory Board for a new series of e-books by Harper-Collins entitled "Voices of the Tea Party". I have been published in such publications as Focus on the Family's Citizen Magazine and am board member of Women on the Wall, an organization working on building a safe and prosperous Texas for our children and grandchildren to thrive.
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One Response to “LET’S GET REAL ABOUT OUR NATIONAL DEBT”

  1. Pingback: “LET’S GET REAL ABOUT OUR NATIONAL DEBT” — We The People of Longview, TX

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