After America - Mark Steyn [4]
None. In America, federal spending (in inflation-adjusted 2007 dollars) went from $600 billion in 1965 to $3 trillion in 2008.22 Regardless.
The Heritage Foundation put it in a handy cut-out’n’weep graph: until the Democrats accelerated up to Obamacrous Speed in 2009, it’s a near perfect straight line across four decades, up, up, up.23 Doesn’t make any difference who controls Congress, who’s in the White House—Democrat, Republican, bit of both. The government just grows and grows, remorselessly. A president of one party and a Congress of the other? Up and up it goes. So much for those sophists who hymn the virtues of “gridlock.” Every two years, the voters walk out of their town halls and school gyms and tell the exit pollsters that three-quarters of them are “moderates” or “conservatives” (a clear center-right majority) and barely 20 percent are “liberals.”24 Sometimes, as in 1980, 1994, and 2010, they explicitly vote for small government. And then, on the Wednesday morning after the Tuesday night before, Big Government resumes its inexorable growth. Newt Gingrich and his dragon-slayers? According to a 2000 report by the Cato Institute, “the “combined budgets of the 95 major programs that the Contract with America promised to eliminate have increased by 13 percent.”25
That’s what’s happened since the Sixties. What of the future? The CBO ran the longer-term numbers: The “alternative fiscal scenario,” which factors in likely changes in policy, calculates that public debt will rise from 44 percent of GDP in 2008 to 716 percent by 2080.26 Then again, the CBO’s “extended-baseline scenario,” which assumes there will be no changes to current policy, says public debt will only rise to 280 percent by 2080.
It doesn’t matter which of these figures is correct, and it was a complete waste of time running the numbers. The worst case is 716 percent? And the best is 280 percent? That’s a choice between dead and deader. Who cares? If either number is right, there isn’t going to be a 2080, not for America.
You can spend a month ploughing through the CBO statistics, but the numbers don’t matter because they all make the same point: under no likely scenario does America’s debt burden do anything but go up. Whether it’s Cloud-Cuckoo Land up or Planet Zongo up is mere details. Nothing is certain but debt and taxes. And then more debt. If the government of the United States had to use GAAP (the “Generally Accepted Accounting Practices” that your company and mine and the publishers of this book have to use), Uncle Sam would be under an SEC investigation and his nephews and nieces would have taken away the keys and cut up his credit cards. By 2010, the federal government was issuing about $100 billion of Treasury bonds every month—or, to put it another way, Washington is dependent on the bond markets being willing to absorb an increase in federal debt equivalent to the GDP of Canada or India—every year.27 While India’s growing its economy, we’re growing our debt to match. We’re asking the world to dump the equivalent of a G7 nation into U.S. Treasury debt every Christmas.
So let’s take it to the next stage: we know American government has outspent America. What happens if it outspends the entire planet?
John Kitchen of the U.S. Treasury and Menzie Chinn of the University of Wisconsin published a study in 2010 entitled:
Financing U.S. Debt: Is There Enough Money in the World—and At What Cost?28
The fact that sane men are even asking this question ought to be deeply disturbing. As to the answer, foreign official holdings of U.S. Treasury securities have usually been less than 5 percent of the rest of the world’s GDP. By 2009, they were up to 7 percent. By 2020, Kitchen and Chinn project them to rise to about 19 percent of the rest of the world’s GDP, which they say is . .