The US government’s stated debt held by the public is almost $13 trillion and keeps growing, although politicians of all stripes are trying to claim credit for “narrowing the deficit.” A narrowing deficit still adds to the national debt. The stated debt is frightening, but if you account for government promises the way the government requires private companies to account for their promises, according to Boston University Economics Professor the real doubt is $210 trillion, which is horrifying. From Ron Haskins, at brookings.edu:
Of all the failures of recent Congresses and Presidents, none is more important than their failure to deal with the nation’s long-term debt. Although Congress tied itself in knots trying to address the problem, the growth of debt remains, in the words of the Congressional Budget Office, “unsustainable.”
Debt figures tell part of the story. When the Great Recession hit, the federal debt was equal to about 40 percent of GDP. But to fight the recession, Congress enacted an $800 billion dollar stimulus bill. Stimulus spending, combined with already enacted spending and tax policy, resulted in four years of trillion dollar deficits. As a result, the debt ballooned to 78 percent of GDP in 2013, almost twice the pre-recession level. The annual deficit is now declining at a stately pace, but by 2016 it will begin increasing again, and by 2020 under CBO’s alternative fiscal scenario, we will once again return to annual deficits above a trillion dollars, thereby once again greatly increasing the national debt.
http://www.brookings.edu/research/opinions/2015/04/08-federal-debt-worse-than-you-think-haskins
To continue reading: The federal debt is worse than you think
