James M. Lindsay

The Water's Edge

Lindsay analyzes the politics shaping U.S. foreign policy and the sustainability of American power.

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Red Ink and Lots of It

by James M. Lindsay
January 17, 2011

 A picture illustration shows a 100 Dollar banknote laying one Dollar banknotes.

A picture illustration shows a 100 Dollar banknote laying on Dollar banknotes. (Kacper Pempel/courtesy Reuters)

The Associated Press reports that the federal government’s debt has now passed $14 trillion. No surprise there. We knew this day was coming. But it’s still depressing that it has arrived.

The AP story reports some sobering numbers to put our debt load in perspective:

  • The debt totals $45,300 for every man, woman, and child in the United States
  • With a projected federal budget deficit of $1.3 trillion this year, the debt is growing by $4 billion a day.
  • The federal government is borrowing 41 cents for every dollar it spends this year.
  • The debt grew 40 percent during George W. Bush’s second term, rising from $7.6 trillion to $10.6 trillion.
  • The national debt is up 40 percent in the first two years of Barack Obama’s presidency.

Those are all ugly numbers.

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  • Posted by Soos Global Capital Advisors, LLC

    “Ugly” is an understatement, though I suspect that for most Americans, if the analysis even goes that far, that’s where it ends. Why? Not because Americans don’t genuinely care about bad situations…to the contrary, Americans have a proven track record of responding to all kinds of national challenges. Rather, no matter how many analogies are offered up as to what it would be like for a common household to out-borrow its payback capacity, at the end of the day, until Americans feel the pinch of the ramifications of a $14Trillion national debt, it will remain elusive and ethereal. Most contemporaries of mine (mid-lifers, as we reluctantly say, “on the back nine”), have grown up hearing of the dreadful deficits and national debt of our country, but somehow, we move on through daily life and participate in the US standard of living which remains high relative to most places on Earth. It’s only when people feel pain that they truly understand the reality of flawed economic policies….just ask the nearly 10% unemployed and the other nearly 8% under-employed Americans. Today’s headlines regarding New York State’s new governor, Cuomo, citing his remarkably high approval ratings even in the face of his plan to tackle the state’s $10+Billion deficit, might just be a case in point. Presumably, the citizenry is pleased with the plan because the Governor has promised no taxes and no new borrowing. Sounds like a good plan? Let’s just say that there are, indeed, no new taxes. How about if the State cuts subsidies for all kinds of services…highway maintenance, police, fire, waste management, etc….and people have to contract privately for those things? The Governor would remain true to his word about “no new taxes”, but the higher costs of services borne by citizens sure will feel like a tax. Bottom line….debt that can’t be easily covered by sources of income creates a stressful situation, and Americans won’t truly feel the pain of the $14Trillion national debt until they start experiencing the Federal version of “no new taxes”! Ugly indeed!

    (Note: Please see important disclosure information related to all communication made by Soos Global on this site by visiting our website http://www.soosglobal.com, secton “Disclosure Information”)

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