The Wall Street Journal reports that Congressional Budget Office estimated the 2012 deficit will be $1.2 trillion, above a trillion dollars for the fourth consecutive year, an amount which is not expected to substantially change for the foreseeable future. The national debt has increased to almost 100% of annual Gross Domestic Product in the five years since deficits ballooned with the Great Recession.
And no one is talking about it. Neither the Republicans nor Obama have much of anything to say about how the rapidly accumulating debt will ever be paid back, or even how its annual increase might be slowed.
This fiscal insanity precipitated by the Great Recession can not continue much longer, never mind indefinitely, as political leaders seem to believe is possible, before it will become a real and substantial existential threat to the republic. While we chase terrorist ghosts that couldn’t hurt us any more than a flea could hurt a lion, the fatally cancerous debt keeps accumulating.
Total government debt has increased half again as much in the last four years, going from roughly $10 trillion to $15 trillion. What more Keynesian stimulus might the neo-Keynesians want? Keynes didn’t specify what sort of specific spending, except in excess of revenues generally, would suffice as stimulative government deficit spending. Do the Keynesians really believe there’s room for more?
A chart might help (a decline on the chart is an increase in the annual deficit); this one is directly from the White House (courtesy of FRED):
And for the total debt, which excludes Fannie and Freddie guarantees of roughly a $5 trillion, and FDIC guarantees of another roughly $5 trillion.
I suspect the reason the politicians aren’t talking or doing anything about the cancerous debt and its corollary, the ubiquitous annual deficits, is mainly because they wish to be elected. The American people have got it in their heads that this money won’t have to be paid back, or doing so won’t be as difficult as it seems. Considering that no real movement to even reign in deficits is politically palatable, it is hard to see how anything but heartache and misery awaits.