“Over the past few years, U.S. government debt held by the public has grown rapidly – to the point that, compared with the total output of the economy, it is now higher than it has ever been except during the period around World War II.”
That’s the chilling opening line of a brief recently released by the Congressional Budget Office. The non-partisan CBO warns that without significant policy reforms “growing budget deficits will cause debt to rise to unsupportable levels.”
By 2020, they predict the national debut will be 90 percent of the nation’s gross domestic product.
Things will get worse, the brief concludes, when “the growing imbalance between revenues and non-interest spending, combined with the spiraling cost of interest payments, [will] swiftly push federal debt to unsustainable levels.”
Meanwhile, the White House Office of Management and Budget reports that fiscal year federal spending was 24.7 percent of GDP in 2009, is expected to be 24.6 percent this year and rise to 25.1 percent in 2011.
“In other words, the White House is admitting that its spending will be at record-high levels as far as the eye can see,” said Mark Hinkle, Libertarian Party chair. “That’s great for special interests who get their money from the federal government, but it’s very bad news for the rest of us.”
“I’m seeing visions of low economic growth and high dependence on government. Future generations are facing economic hardship instead of prosperity.”
Mike Beitler, Libertarian candidate for U.S. Senator, is surprised that many people, especially young people, don’t understand how the out-of-control national debt will affect them. “The cost of everything will go up,” he said.
“The Federal government’s irresponsible spending must end,” said the economic professor and lecturer. His platform calls for an audit of all federal government agencies and programs and abolition of those which are found to be ineffective.
Beitler also advocates an independent audit of the Federal Reserve. “It is a lie that the Fed is controlling inflation; the Fed is the cause of inflation,” he said. “Runaway government spending and the uncontrolled creation of new dollars through printing and electronic credits will inevitably lead to a crash in the value of the dollar and extreme inflation.”
A bill to audit the Federal Reserve introduced by Rep. Ron Paul (R-Tex) and co-sponsored by 320 House members was defeated in June by a vote of 229-198 when 114 of the co-sponsors, all Democrats, jumped ship and voted against it.
“The federal government is commanding a larger percentage of our economy than it has at any time in American history, except a few years during World War II,” Hinkle said. “Instead of free citizens making our own economic decisions, the federal government is making those decisions for us.”
Hinkle said that at the beginning of the 20th century, the federal government spent less than five percent of GDP. The OMB report projects that federal spending will still be more than 23 percent of GDP in 2020.
“The current crop of politicians in Washington simply don’t have what it takes to reverse this damage. Democrats and Republicans have proven decade after decade that they are incapable of doing anything but grow government,” Hinkle said. “In just the last ten years, they have worked together to give us two costly wars, a giant Medicare expansion, and the TARP bailouts, among many other massive new expenses.”
Gross domestic product is the total market value of all final goods and services produced in a country in a given year, equal to total consumer, investment and government spending. It includes the value of exports minus the value of imports.