published Saturday, February 18th, 2012

National debt hits World War II levels, for no good reason

More than 400,000 American service members died during the period of U.S. involvement in World War II, starting in 1941 and ending with Allied victory in 1945.

While those deaths were tragedies for friends and family back home and for our entire nation, the threat posed by Nazi Germany and Imperial Japan left the United States no choice but to fight with all we had.

That required the full mobilization of America's economy and resources, which was enormously costly in dollar terms. But of course the alternative -- defeat at the hands of the Nazis and Japanese -- was unthinkable. Therefore, most Americans probably did not question the need for the federal government to borrow whatever money it took to secure victory.

Just how deep in debt did we go?

Well, figures from the U.S. Treasury Department and the Office of Management and Budget indicate that by 1946, the national debt represented a staggering 122 percent of our gross domestic product. GDP is the total value of all goods and services produced in our country in one year. So during that time period, we actually owed more than all that we produced in a year.

Fortunately, that painful economic circumstance did not last. Our debt soon fell below GDP and stayed there.

Until very recently, that is.

In 2011 -- for the first time since the late 1940s -- the national debt once again exceeded America's total economic output. The debt came to 103 percent of GDP.

But why?

It is true that we have been fighting wars in Iraq and Afghanistan in recent years. It is also true that those wars have exacted a painful toll in both blood and treasure.

But by no means were those conflicts -- even combined with the broader war on terrorism -- anywhere nearly as broad in scope as World War II was.

Why, then, has our national debt again climbed almost to the alarming heights it reached by the end of World War II? Sure, there is waste in national defense just as in any area of government, but it is irrational to blame our current debt crisis strictly on defense spending.

The reality is, we are choosing -- voluntarily and in a multitude of ways -- to spend vastly more money year after year than our country takes in. We are now in our fourth consecutive year of trillion-dollar-plus budget deficits, with our total debt exceeding $15.3 trillion.

In the midst of that crisis, President Barack Obama has proposed another year of massive deficit spending -- more money for infrastructure, more money for "green energy" schemes and so forth. And he has made it plain that he has little interest in significant spending reductions.

"We can't just cut our way into growth," the president said in making his big-spending budget proposal.

But how would he know? When has he tried? His entire presidency has been one attempt after another to spend our way into growth, and it hasn't worked. The $862 billion stimulus was a grab bag of dashed job growth expectations and deeper debt. Unemployment is far higher today than it was supposed to be if Congress approved the stimulus. Widespread home foreclosures continue, and the president's costly initiatives to stem that tide have, by his own admission, failed. Historically high numbers of Americans are now on food stamps as well.

Meanwhile, the president gives short shrift to serious reforms that would make Medicare and Social Security solvent for the long term, and so the day when they will go broke gets ever closer.

We are fortunate not to face a global conflict on the scale of World War II. But it is high time we insisted that Congress and the president "declare war" on federal spending that is pushing us not toward military defeat but toward economic calamity.

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nucanuck said...

To stop the spending is to move directly into contraction and deflation which also would send Federal debt skyrocketing as tax revenues shrunk. No politician of any stripe would be willing to knowingly plunge the country into an economic abyss...even if that were the best policy.

That is where we are today...at the edge of an economic abyss with no policy options that will spare us deep economic disruption and pain. No wonder that when push comes to shove, Rs and Ds both buckle and vote to spend more because the options seem unthinkable.

We are violating the first rule of holes...when you are in deep trouble, quit digging...but we continue, knowing that ultimately the pain will be even greater.

There is a pall over the land and we can all sense it. We are afraid as we watch our country slowly slip from power toward an unknown destination. We want to do something, but we truly know not what.

February 18, 2012 at 12:35 a.m.
joneses said...

A vote for obama is a vote for more massive debt.

February 18, 2012 at 6:38 a.m.
conservative said...

Many great points of truth in this article. Must read for all, especially Lieberals.

Two great bumper sticker quotes, one by the writer: Declare War On Federal Spending.

The other by Joneses : A Vote For Obama Is A Vote For Massive Debt

February 18, 2012 at 7:36 a.m.
ArnoldZiffel said...

Now BO wants to dump $800,000,000 into places now like Libya and Egypt??? His budget is outrageous and he doesn't give a hoot about spending EVEN NOW. What's his aim? If he's not trying to drive us off the edge then what's he doing? What kind of plan is that? His plan is to make us slaves to debt and reduce our defenses while other countries are getting more and moare aggressive. GOOD ONE!

February 18, 2012 at 9:26 a.m.
fairmon said...

Well said and true nucanuck. The truth is not what many want to hear, they are in denial.

February 18, 2012 at 9:49 a.m.
conservative said...

That we can tax and spend our way into prosperity has to be one of the most outrageous economic lies of all time

February 18, 2012 at 9:49 a.m.
conservative said...

We can't spend our way out of debt. No individual has ever done it and no nation has ever done it.

February 18, 2012 at 8:17 p.m.
acerigger said...

Didn't one of the "four horses of the apocolypse have something to do with global economics?

(jes' curious)

February 18, 2012 at 9:30 p.m.
Legend said...

Is this the intended outcome of the one from the prior administration who said: *"Why wait for armageddon when you can make it happen?"

{jes' curious II}

February 19, 2012 at 4:52 p.m.
fwbonnell said...

We need a Constitutional Amendment that puts a limit on Federal Debt that can only be increased in a national emergency. To me a national emergency would require a declaration of war on a sovereign nation and starting a military draft.

Then Congress and the Administration, whomever it may be, would have to start working on real solutions to our economic problems. With economic growth would come increased revenue to support our government, rather than just continuing to borrow until our currency collapses.

February 21, 2012 at 1:30 p.m.
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