E-Newsletter No. 14
February 2015
If not us, who?______If not now, when?
Our Editorial Board recently ran across an interesting article. For the past several months, consumer debt has been increasing, as American households have become somewhat more confident about the state of the economy. The consumer debt amount that was reported in the article excludes real estate loans, which is probably appropriate, because that type of debt is backed by the associated asset being financed. Consumer debt includes credit card debt, auto loans, student loans, etc, and represents the personal decisions made by American families. This amount has recently risen to a “record level” of $3.3 trillion. Now… contrast that “record” amount with the $18 trillion that has been borrowed on our collective behalf by our elected officials.
So, how did we get to this $18 trillion record amount? As we noted last month, and as shown in the table below, the growth in the US debt represents a collective failure of both the legislative branch and the executive branch, and by the politicians in both political parties –
Jimmy Carter (1976-1980)_________$.6T to $.9T – An increase of $.3 trillion
Ronald Reagan (1980-1988) _______$.9T to $2.6T – An increase of $1.7 trillion
George H.W. Bush (1988-1992)_____$2.6T to $4.1T – An increase of $1.5 trillion
Bill Clinton (1992-2000)_________$4.1T to $5.7T – An increase of $1.6 trillion
George W. Bush (2000-2008)_______$5.7T to $10.0T – An increase of $4.3 trillion
Barack Obama (2008-2015 so far)__$10.0T to $18.0T – An increase of $8.0 trillion (so far)
As we have noted in previous newsletters, the primary driver of the annual deficit and our growing debt problem continues to be the country’s “entitlement” programs. Starting with FDR’s Social Security initiative during the 1930s, the executive branch has played a significant role in transforming the country into what has been termed an “Entitlement State”. Additional entitlement programs were established during the 1960s by LBJ’s Great Society initiative and the War on Poverty, which brought us Medicare / Medicaid and a number of new welfare programs. The Entitlement State has grown even larger in recent years with the Affordable Care Act (Obamacare), and during the president’s most recent State of the Union speech, he proposed that we should establish even more entitlement programs, such as “free” college education.
It should be noted that the US House of Representatives and US Senate are also partly to blame, because our elected representatives are responsible for approving and funding these programs. Our country’s financial future has been put at risk by politicians who want to continue to provide generous gifts from the public treasury.
Our Foundation’s objective is to promote personal responsibility (rather than a constantly expanding set of costly government programs). Our primary agenda item is to re-establish fiscal responsibility by the federal government. We seek to (significantly) reduce the size of the Entitlement State, and re-establish a Self-Reliant Society. Because career politicians have found out that they can stay in office by pandering to special interest groups, and by bribing the citizenry with their own money (and with future generations’ money), our Editorial Board believes that one of the best ways to re-establish fiscal responsibility is to implement Term Limits for members of the US House of Representatives and US Senate.
US Debt Clock – – January 1st – $56,356 per citizen / February 1st – $56,533