Debt

I think that the following has some relevance: over the years, I have remembered a time when I was having a drink with a friend (at the Hi Lo lounge on Beacon Street in Boston - 35 cents for a shot and a beer - as the name implies, very classy joint) when the TV caught my eye. Lyndon Johnson was making a statement related to how happy he was to keep - in a time of war, mind you - the federal budget below $400 billion. As I have reflected on this moment over time, the $400 billion figure has become less and less believable. I thought about it again this morning as I read an article about Ben Bernanke getting nominated to a second term as Fed Chief, which drove me to look it up. I was actually right. At Sept. 30, 1968 federal debt outstanding was $347.5 billion ... today, it's $11.7 trillion, 33 times higher than in 1968. Further, in 1968, outstanding debt was approximately to $2,300 per US citizen ... today, it's about $39,000. The population has about doubled, but debt outstanding has gone up by 3,336%.

All of this is a bit abstract and the really smart economists will argue, that as a percent of GDP the number is really not that bad. Guess what? it is that bad and it's getting worse. As an example, OMB just released the estimate for the federal deficit ten years hence at $9 trillion. I'd be willing to bet that that number is about equal to the 2020 GDP - and that's just the deficit!

Golly, don't the members of Congress really inspire confidence? In Michelle we trust!