Is Washington Bankrupting America?

According to a recent GWU Battleground poll, nine in 10 likely voters are at least “somewhat” concerned about the current level of government spending.  74 are “extremely” or “very” concerned.  And 58 percent think the level of spending is unsustainable.

Is the public right? Is Washington bankrupting America? Some facts from the video:

Spending per household has risen over 40 percent in the last 10 years – and is set to do so again in the next 10 – pushing debt (and interest on the debt) to unprecedented levels.  But that’s just a result of past spending.

Add in our government’s $106 trillion in future spending commitments – that cannot be paid for – and it becomes clear that our government’s spending is setting the country down a path toward bankruptcy.

We can solve it, but politicians will have to make tough choices.

Increasing taxes can’t do the trick ($106 trillion is equivalent to taking all of the taxable income from every American nine times over), nor is it fair to saddle taxpayers with a problem created by government irresponsibility.

We need real spending reform.  Merely returning to the spending per household levels of the 1990s would balance the budget in three years.

Yet, policies under Bush and Obama have made the problem worse, not better: budget cuts that pale in comparison to spending increases, more lobbyists, more earmarks, expanded spending on autopilot programs like Social Security and Medicare, and savings gimmicks that don’t amount to meaningful change.

Reform can only be achieved if the public is informed and engaged. You can start by doing the following:

(1) Share this video with at least 5 friends, family and coworkers.

(2) If you haven’t already, subscribe to receive emails from us (you’ll be first to receive our videos and other timely info about economic policy).

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Below are sources for data featured in the video:

Our spending is unsustainable. Over the last 10 years, federal government spending per household increased by over 40 percent….and will do so again in the next 10 years.

Source: calculations based on data from the Office of Management and Budget for spending totals (Historical Table 1.1 for spending in 2000 and 2010; Summary Table S-1 for 2020) from the FY2011 Budget of the United States and the Census Bureau Table HH-1 for number of households (note: 2020 household figure determined based on an extrapolation of 2000-2010 household growth).

Over the last 10 years, federal government debt per household increased by almost 70 percent….and will do so again in the next 10 years.

Source: calculations based on data from the Office of Management and Budget (Historical Table 7.1 for debt in 2000 and 2010 and sum of “Debt Held by Government accounts” and “Debt held by the public” from Summary Table S-14 for 2020) and the Census Bureau Table HH-1 for number of households (note: 2020 household figure determined based on an extrapolation of household growth).

Meanwhile, median American household income decreased by about 1 percent in the last 10 years.

Source: Census Bureau Table H-6 (inflation adjusted dollars).

In 10 years, interest payments on the debt will more than quadrupled.

Source: calculation based on data from the Office of Management and Budget (Summary Table S-4).

In 10 years, interest payments on the debt plus autopilot programs (like Social Security and Medicare) will consume 90 cents of every federal dollar.

Source: calculation based on Office of Management and Budget Summary Tables S-1 and S-4.

Our spending is only a fraction of the commitments made. The total value of our future spending commitments – that cannot be paid for – is $106 trillion.

Source: $106.4 trillion represents the net present value of the federal government’s unfunded liabilities as calculated in Forbes by former Treasury Department economist Bruce Bartlett based on actuarial tables from the Social Security Administration and data from the Medicare Trustees Report.

106 trillion dollars = selling every home in the U.S….5 times over.

Source: Based on the Federal Flow of Funds Report from the Federal Reserve, Table B.100, line 3.

106 trillion dollars = taking all of the income of every American.…9 times over.

Source: Based on Personal Income of $12 trillion for 2009 (most recent year available) from National Income and Product Account Table 2.1 of the U.S. Government’s Bureau of Economic Analysis.

106 trillion dollars = selling every household item of value in the U.S….twice.

Source: Source: Based on the Federal Flow of Funds Report from the Federal Reserve, Table B.100, line 42.

Our spending is solvable. By merely reducing government spending per household to 1990s levels.…we could balance the budget in three years. Our spending is solvable unless Washington won’t solve it. Our spending is bankrupting America.

Source: Based on revenue projections from the Office of Management and Budget in Summary Table S-1 from the FY2011 Budget of the United States; the 1990s average is adjusted for inflation and taken from Historical Table 1.1 from the OMB); household projections are based on an extrapolation of Census Bureau Table HH-1.

 

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