The Depths of Debt

The sense of urgency concerning US debt problems has apparently faded into the background of American politics.  Have we simply gotten distracted? Or have we lost interest and given up the fight? We seem to be easily distracted by political scandals, such as the controversies surrounding politician Anthony Weiner, instead of remaining focused on the more detrimental activities our government officials have been engaged in.  We already knew Anthony Weiner liked to share his privates on the internet... now back to discussing the real issues: 

The graph above shows US Federal Deficit/Surplus Spending since 1940. While the US has engaged in deficit spending throughout history, recent years have displayed unprecedented levels of deficit-financed spending. In 2008, the annual deficit was $415.7 billion. A year later, it was $1.276 trillion.  Over the course of a year, the amount of deficit spending more than tripled. As we can see, our debt problems are becoming more and more compounded. The graph below tracks the magnitude of the US Federal Debt since 1940.

It's not news that the level of deficit spending, and hence our ever growing debt problems are a result of increased and unbounded US Spending. According to the Office of Budget and Management Total Outplays (in 2005 dollars) were: 

• $982.2 billion in 1970
• $1,368.2 billion in 1980
• $1,831.3 billion in 1990
• $2,039.9 billion in 2000
• $3,022.2 billion in 2012

In other words, US Federal Spending has more than tripled over the last forty years. 

While US National Defense spending has become a smaller portion of the budget since 1970, Defense outlays have still increased considerably during that time.  Most significantly, however, is the large percentage of the budget that has be spent on Welfare Programs, such as Medicare, Medicaid, and Social Security. We can see this from the charts below, which show Spending as a Percentage of the Budget by Major Category for each decade. 

Naturally, it is difficult and politically unpopular to cut spending, but it is also unrealistic to continue spending and borrowing money at the rate we are. Greece is not a far off imaginary world. So, when will we get our priorities straight and find a way to get "fiscal house" in order?