Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : PRESIDENT GEORGE W. BUSH -- Ignore unavailable to you. Want to Upgrade?

To: jlallen who wrote (474283)	10/10/2003 2:08:08 PM
From: Kenneth E. Phillipps	Respond to of 769670

U.S. debt growth in one year dramatic By Aldo Svaldi Denver Post Business Writer The U.S. government has run up as much debt in a single year as it did during the country's first 200. The total national debt grew by $576 billion during the 12 months that ended Oct. 3, about the same amount the country owed going into its bicentennial, according to the Treasury Department's Bureau of Public Debt. "We can't sustain the level of deficit spending we have now for the foreseeable future," said Robert Bixby, executive director of the Concord Coalition in Arlington, Va. "It looks like these deficits are not a temporary phenomenon." Even assuming a robust economy from here on out and the eventual repeal of recent tax cuts, deficits are forecast to continue for at least another decade and strain government coffers as the baby boomers head into retirement, Bixby said. Back in 1976, the massive generation born after World War II known as the baby boomers were in their 20s heading to their 30s. Today, most are in their 50s climbing toward 60 and they could find the cupboards bare as they seek to draw on Social Security and Medicare. "We don't have as much time to prepare," Bixby said. "It is building into a long-term problem." The total national debt, which includes what the government owes the public and itself, rose from $6.23 trillion to $6.81 trillion during the past 12 months. That works out to more than $23,000 per American, or enough to buy everyone a 2004 Chevy Blazer or Ford Taurus. To be fair, $1 of debt in 1976 equals about $3.50 in today's dollars because of inflation, so the numbers aren't directly comparable. Also, economists said deficits are to be expected during a slow economy, and a reduction in government spending during a slump could worsen a bad situation. "There are pros and cons to deficit spending," said Sanjai Bhagat, a finance professor at the University of Colorado at Boulder. "There is a large political context to it." But some economists question whether taxpayers are getting a good return for the huge deficits being run up. "The amount of extra government stimulus has been extraordinary compared to the level of economic slowdown," said Jeff Lemieux, a senior economist with the Progressive Policy Institute in Washington. "Over time, if you deficit spend injudiciously you get into situations like the Latin American countries." The bicentennial debt figure included the cost of two world wars, the Korean and Vietnam wars, and the hangover from the Great Depression and resulting social programs. The debt run up in the past year includes the cost of a relatively short war in Iraq, tax cuts and higher domestic spending, and a dramatic drop in federal revenues. Measured in economic terms, the recession of 2001 was among the mildest on record. Measured in terms of the decline in government revenues, it has been among the more severe, said Gary Burtless, a senior fellow at The Brookings Institution in Washington. Burtless said total debt represents about 63 percent of the country's total economic output in a given year, up from 60 percent a year ago and 50 percent in the early 1990s. The debt burden topped 100 percent after World War II and was higher than current levels during the 1980s, but it is growing rapidly. Burtless and Bixby argue that the remaining cushion needs to be preserved and restored before the boomers start retiring in large numbers beginning in 2015. "It will put a huge strain on the budget and the economy," Bixby said. "We are mortgaging our future." denverpost.com RETURN TO TOP Go to Section