The US Debt Grows Again

Surprise, surprise, the national debt will continue to grow, now that President Bush has signed into law a bill raising the debt limit to $9 trillion.

From the article:

The bill means the government can borrow a further $781 billion and stops what would have been a first ever default of Treasury notes.

In addition, it permits the US to pay for the war in Iraq without increasing taxes or making domestic cuts.

Ah, the "put it on credit" approach to fiscal solvency. We can't keep spending like drunken sailors on a one-night shore leave and expect to have a healthy economy. But what do I know, I'm one of the few people I know without any personal debt.

The debt increase, the fourth since Mr Bush came to power, comes as the budget deficit reaches near record levels.

An additional increase in the debt limit next year is likely, the Associated Press news agency said.

Ah, the glory days of a burgeoning debt load are upon us. Both of the major political parties are responsible for this ongoing fiasco, though I'm more inclined to wag my finger at the Republican Party. I voted for candidates who promised to be fiscal conservatives, and instead I get spend-happy Republicans in name only. Thanks, guys, I really appreciate your attempts to screw me and the rest of the country over. It's time to stop building useless bridges and to start limiting spending and pork.

The new chairman of the Federal Reserve System is worried, too:

Mr Bernanke warned persistent deficits need to be curbed, particularly as an ageing population will raise pressure on government spending.

Widening the deficit would put future living standards at risk, he added.

"As a result, I think it would be very desirable to take concrete steps to lower the prospective path of the deficit," he said.

Keep repeating that message, Mr. Bernanke, as loud and as often as possible.

It's not all gloom and doom, however. Tom Abate, writing the in the San Francisco Gate, believes that our current financial position isn't the problem, it's where we'll stand around 2010. From his article:

Nonpartisan budget watchers say the current debt load isn't the problem. They worry about what happens after 2010, when retiring Baby Boomers begin placing demands on Social Security and Medicare.

"It's not where we are. It's the trajectory we're on,'' said Douglas Holtz-Eakin, who just stepped down as head of the Congressional Budget Office, the nonpartisan research arm of Congress.

As his last official act, Holtz-Eakin sent Congress six scenarios that look at federal spending and debt through 2050. All six assume that Social Security benefits will be paid as required by current law. The differences lie in how much inflation occurs in Medicare and Medicaid; higher or lower levels of taxation; and whether, or how deeply, Congress curbs spending on defense and other programs.

So, should we get to work on the problem while there's still time?