The past few years have seen a sharp rise in the debt of the federal government. At the end of fiscal year 2008, debt held by the public amounted to $5.8 trillion--equal to 40 percent of the nation's annual economic output (gross domestic product, or GDP), a little above the 40-year average of 35 percent. Since then, debt held by the public has shot upward, surpassing $9 trillion by the end of fiscal year 2010--equal to 62 percent of GDP, the highest percentage since shortly after World War II. The surge in debt stems partly from lower tax revenues and higher federal spending related to the recent severe recession and turmoil in financial markets. However, the growing debt also reflects an imbalance between spending and revenues that predated those economic developments.
At the same time, a sharp drop in interest rates has held down the amount of interest that the government pays on that debt. In 2010, net interest outlays totaled $197 billion, or 1.4 percent of GDP--a smaller share of GDP than they accounted for during most of the past decade.
The Congressional Budget Office (CBO) projects that, under current law, debt held by the public will exceed $16 trillion by 2020, reaching nearly 70 percent of GDP...
It is right now October 19, 2013, seven years ahead of the prediction above. And here's where we are:
That's right, we've already hit that $16T figure and passed it by another trillion. Meanwhile, GDP has declined (as it's wont to do when over twenty-one million people are unemployed) so that our debt is currently at 73% of GDP according to this alarming paper from the CBO.
Here's a graph from that same paper, to which I've added annotations:
Notice that spending relative to GDP stayed fairly flat until the Dems retook Congress. Then, once they had the White House as well as Congress the debt shot up like a rocket, flattening out somewhat once the GOP retook the House.
Amusingly, the CBO seems to be predicting that the GOP will retake the Senate in 2014 (notice the decline) and the White House in 2016 leading to a Bush-era flattening until about 2024 when the Dems will regain control through to the end of the graph.
From their lips to God's ears.
But how could the CBO have been so completely wrong about the predictions they made in 2010? Two reasons: Number one, Barack Obama still had the 2012 elections ahead and truthfulness from the CBO certainly wouldn't help there. So he pressured them to lie, just like he pressured the UN's IPCC to lie about Global Warming.
Secondly, even the CBO didn't fully appreciate just how adept the Democrats have become at looting the treasury. That figured that by about the 100th Solyndra or auto bailout or similar scam the media would finally grow a conscience and apply some pressure.
They were wrong.
And so, here we are, a trillion more of debt seven years early. And with it the interest payments (cost of servicing the debt) that take ever increasing amounts of tax dollars and apply them towards something that does not benefit the taxpayers in the slightest.
Proof that we've already entered America's death spiral of debt.