National debt is still growing; how much can we afford?

For the fifth time since President Bush took office, it has become necessary to increase the limit on the national debt.

Just 18 months ago, when Congress raised the debt limit from $8.2 trillion to just shy of $9 trillion, the administration estimated that by the time President Bush completed his second term, the national debt would stand at $8.6 trillion. Now, with about a year and a half remaining Bush’s second term, the debt is already approaching the $9 trillion mark.

Congress tends to take these increases in stride because, after all, they know the money is needed to pay for things they’ve already voted for. The president tends to take them in stride as well since, for most of his presidency, he chose not to veto a single spending bill the Republican Congress passed.

Talk is cheap

Now that the Democrats hold a slim majority in the House and Senate, President Bush is beginning to talk like a fiscal conservative, but it is just talk.

When Ronald Reagan took office 26 years ago, the debt was less than $1 trillion. It increased four-fold throughout the Reagan and George H.W. Bush years. When Bill Clinton took office, it was a little over $4 billion and grew to $5.6 million but was leveling off and even being reduced by two years of budget surpluses, including the first budget that President Bush inherited.

Then it exploded, fueled for a while by the economic upheaval of Sept. 11, 2002, but subsequently fueled by a lack of economic discipline.

For four years, the debt grew at an average of $1.7 billion a day. That’s only about $5.50 a day — every day for every man, woman and child in the nation. Doesn’t sound like all that much, until you consider that it works out to more than $2,000 a year a piece ($8,000 a year for a family of four).

As it stands now, the national debt is about $30,500 per person. That’s the amount each citizen who dies leaves behind, and each child born inherits. When President Bush took office it was about $19,000 per person.

Neither Congress nor the president is likely to make much noise about increasing the borrowing limit. For one thing, it has to be done, unless one side or the other is willing to shut government down. And that isn’t likely in a time of war or at a time when the dollar is weakening and domestic and world financial market are already jittery about falling values in the U.S. housing market and rising costs in the world energy market.

But certainly the need to get budget deficits and growing debt under control is something both Republican and Democratic presidential candidates ought to be discussing seriously — beyond mouthing platitudes and slogans.

Who holds the paper?

The problem goes far beyond the simple increase in the amount of debt.Because of another deficit — the trade deficit — an increasing percentage of that debt is held by foreign creditors, including the Chinese government.

And anyone who thinks the cost of government is high today, hasn’t seen anything yet. As U.S. Sen. George Voinovich, R-Ohio, has pointed out, “Forty years ago, Social Security, Medicare, and Medicaid accounted for 3 percent of GDP. Today, they're up to 9 percent. And in another 40 years, they'll be up to 18 percent — equal to total federal revenues and crowding out all other spending."

There are those who claim that our growing national debt is nothing to be overly concerned about and they take comfort in our “strong” economy. But just as too many families are finding out that it was easy to borrow more than they could afford, we should all be worried that some day we’re going to find that Uncle Sam borrowed more than all his nieces and nephews — us and our children — can afford to repay.