Monday, March 20, 2006

a trillion here, a trillion there

Here's a companion to the post on Chicken Little. In an article on the vote in Congress to raise the debt ceiling, USA Today published some dramatic graphs.

Here's a citation to the article and some extracts:
Senate OKs raising federal debt limit to about $9 trillion
By Richard Wolf, USA TODAY


[Gross domestic product is a nation's annual economic output. The debt is now] more than the gross domestic product of China, the world's second-richest nation. It's more than the combined GDP of Japan and India, the next richest nations. [The debt is now 2/3 of the US GDP, up from 1/3 in 1981.]

U.S. Treasury obligations are viewed as one of the safest investments in the world. Lured by the stability of the U.S. economy, foreign governments, banks, companies and individuals have sharply increased their U.S. debt holdings. As recently as 1970, foreigners owned only 5% of the debt held by the public — that's the portion of the debt that doesn't include the amount the government owes itself, in the form of IOUs to entities such as the Social Security trust fund. By 2005, foreigners had increased their share to 45%.

In 2005, interest on the debt was $184 billion, which made it the fifth biggest item in the federal budget, behind defense, Social Security, Medicare and Medicaid.

No comment necessary (from the Washington Post): Lawmakers boost spending after raising debt ceiling.

WASHINGTON - With no brakes on spending and no moves afoot to raise taxes, the federal debt is now rising at an unprecedented clip. Congress raised the limit on the federal government's borrowing by $781 billion Thursday, and then lawmakers voted to spend well over $100 billion on the war in Iraq, hurricane relief, education, health care, transportation and heating assistance for the poor without making offsetting budget cuts.

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