When President Barack Obama took office, the national debt was around $10 trillion. The president then had the U.S. Treasury print a trillion dollars in new money to spur economic growth. And then another trillion dollars or so in deficit financing was arranged to pay for Mr. Obama's first budget. Now the federal debt is said to be about $13 trillion. Or is it?
These numbers greatly understate the national debt. Unfunded liabilities in Medicare and Social Security retirement add something like $30 trillion to the debt. A myriad of federal loan guarantees could cost trillions more should the economy continue to stagnate.
And there is more debt on top of that. The collective states, counties and cities are big borrowers and will face some level of default in the future. Public employee benefit funds in nearly all states are woefully underfunded. Tiny West Virginia alone is looking at $13 billion in unfunded post-employment benefits debt.
Consumers are in debt up to their eyeballs -- mortgages, car loans, student loans, credit card debt and home equity (or second mortgage) loans. Millions of Americans are unemployed or won't work and live on the dole. Millions of Americans have spent their meager savings. Millions of Americans are flat broke.
The American people, in debt as they are, see only a magnificent nation. They see beautiful cars traveling on beautiful superhighways. They see beautiful houses with beautiful appliances and flat screen TVs. They see beautiful college campuses and public schools. They see beautiful government buildings. They see beautiful sail boats, cabin cruisers, speed boats and Jet Skis. They see beautiful vacation homes at the sea shore, the ski slopes or anywhere else there is natural beauty.
They see an army, a navy, and an air force second to none in the history of mankind. They see outer space as a parking lot for space stations, GPS and communication satellites.
Ask any American, and he or she will tell you that Americans have built and paid for all of our beautiful notions with our tax money. For some reason, though, they cannot see the mountain of debt that has financed the modern American lifestyle.
As this charade continues to play out, I am reminded of Wimpy, the obese moocher in the Popeye comic strip who was forever saying, "I will gladly pay you Tuesday for a hamburger today."
Tuesday's math lesson: How do we pay back the $13 trillion we currently have borrowed? And then, how do we pay $40 trillion in future obligations? Just how does our nation generate budget surpluses of $1 trillion to $2 trillion per year, each year, for the next 20 years?
One school of thought -- borrow more, spend more -- follows Keynesian economists who believe that the president's stimulus plan didn't go far enough. The opposing view -- cut taxes, cut spending -- is held by the Tea Party.
As for borrowing more, just what is our national credit score?
As for raising taxes, repealing the "Bush tax cuts" will likely ignite a class war.
As for cutting spending, who gives up an entitlement? Do we cut the Social Security retirement benefit? The mortgage interest deduction? The earned income credit? The arts? Defense? National parks?
Remember now, we are asking a government that can't run a piddling passenger train at a profit to solve this multi-trillion-dollar problem.
The election of Barack Obama and his message of "Change" were all about the hubris of the left. The Tea Party revolt is all about the hubris of the right. Neither side will compromise its position on taxes and spending; their hubris prevents it.
The lefties are fed up with Washington. And so are the righties. But to solve the debt crisis, both sides need to admit: "Mea culpa!" After all, partisan politics is what got us here.
In 1975, New York City faced bankruptcy. Then-President Gerald R. Ford told the city that the federal government would not bail it out. The next day, there was a newspaper cartoon that showed a housewife, with her hair in curlers, wearing a housecoat and ironing clothes while her husband, unshaven, sat at the kitchen table in his underwear reading the morning paper. The newspaper headline blared, "FORD TELLS CITY -- DROP DEAD!" Caption: The husband tells his wife, "Well, at least we still have our pride."
We've borrowed so much with so little to show for it that it's almost comical.
