r960-3d03485e53c2e3dc472664fb186e64ef.jpg


Most people think of the national debt as a huge amount of money the government owes, which grows each year because of the budget deficit, which is the amount of new money the government has to borrow to maintain current spending levels.

But the national debt is growing much more quickly than that. Over the last decade, the debt has expanded by more than $3 trillion beyond the sum of the government’s budget deficits over that same period of time.

In most years, in fact, the government’s reported budget deficit is lower than the actual growth in the national debt. Fiscal 2016 was a perfect example.

Just weeks ago, the Treasury Department reported a $587 billion budget deficit for the fiscal year. But according to the government website that tracks the total U.S. debt “to the penny,” the actual national debt grew by about $1.4 trillion.

Why such a big difference? Some of it has to do with politics and timing, and most years weren’t as skewed as 2016.

When fiscal 2016 began, the U.S. had already reached the debt ceiling, and normal borrowing had been frozen for several months. That means the total debt level started at an artificially low point, and quickly rose from there.

On the first day the debt ceiling was lifted, pent-up borrowing demand prompted the national debt to jump more than $300 billion.

But there’s a more fundamental reason why the national debt is growing faster than the government’s annual budget deficit. And that is: The budget deficit is not the only way the national debt grows.

The budget deficit encompasses a discrete set of borrowing decisions, and it’s still far and away the main reason behind the growth of the debt. But the other means of borrowing that aren’t included in the budget deficit are significant.

John Oliver: A Trump presidency is 'not normal. It is f—-ed up'

Also from the Washington Examiner

The liberal comedian urged viewers to support various progressive-friendly organizations and the press.

11/14/16 1:48 AM

For example, in the last 10 completed fiscal years, budget deficits totaled $7.9 trillion. But the total national debt rose by a little over $11 trillion.

That’s a $3 trillion difference, and that additional borrowing comes from two main government actions.

One is a group of decisions related to federal lending, which often includes things like student loans, mortgage programs and other federal credit programs.

The federal government saw two big years in a row of these “other means of financing” during the Great Recession. During fiscal years 2008 and 2009, these programs added $313 billion and $328 billion in additional borrowing. But it also took a $314 billion hit for these programs years later, in 2014.

A House GOP aide explained that these programs are treated as debt immediately because “we actually have to go out and borrow the money.”

Trump could sideline a generation of rising Republican stars

Also from the Washington Examiner

President-elect Trump with his unexpected victory has sidelined the White House prospects of an entire generation of Republican stars.

A bevy of Republicans in their 40s and 50s — governors and senators, some on the rise, others nearing or at the apex of their political careers, were expected to contend for the presidency in 2020.

Then along came Trump, the 70 year-old Baby Boomer who muscled other boomers and Generation X Republicans out of the 2016 nomination and with his win over Hillary Clinton put their presidential aspirations on ice indefinitely.

Their next opportunity to run for president is probably eight years away.

11/14/16 12:01 AM

All told, these “other means of financing” added $1.3 trillion to the national debt over the last decade.

Another less covered but equally important factor is intra-government holdings, which is money the government borrows from itself, most frequently in the form of borrowing from Social Security fund.

Conservatives have criticized this form of borrowing since it’s essentially the government borrowing from itself to fund deficit spending. But it continues to happen: 10 years ago, total intra-government holdings were $3.7 trillion, and they now stand at $5.4 trillion — a $1.7 trillion increase.

At least under current projections, these components are expected to keep rising over the next decade. The Congressional Budget Office says the budget deficit is expected to rise again to $1 trillion by 2024, and that “other means of financing” are also expected to add dozens of billions of dollars each year.

Reince Priebus named Trump's White House chief of staff

Top Story

Brietbart leader Stephen Bannon will serve as senior counselor to the president.

By Jacqueline Klimas

11/13/16 4:27 PM



Source link

About the Author:

Leave a Reply