by Rep. Frank Lucas (OK)
One trillion, four hundred twenty billion dollars. It’s an astounding number. It’s more than the entire economy of India and enough to give every man, woman, and child in the United States $4700.
It is also our country’s federal budget deficit for 2009. That means that in the fiscal year 2009, which runs from October 1, 2008 through September 30, 2009, the federal government spent $1.42 trillion more than it took in. To put this in perspective, last year’s deficit was $459 billion – still an astounding number, but less than half the deficit for this year.
When our nation runs with a deficit like this year, we increase our national debt – or the total debt we owe over the life of our country. Our current national debt is $9.1 trillion, and climbing every day. The non-partisan Congressional Budget Office has projected that, under President Obama’s spending plans, our national debt will rise to $17.1 trillion by the year 2019, meaning an increase of $8 trillion over the next ten years. Most of this debt is held by foreign countries. China, not known for their great relations with our country, holds the most – more than $800 billion.
If numbers like this don’t shock you, maybe this thought will: what happens when these investors decide they want to cash in their T-bonds and T-bills? It’s not that hard to imagine. Right now, the United States government seems to have no interest in paying off any of our debts, so investors will be much more like to want to cash in their holdings or to purchase less T-bonds and T-bills. This would result in an even further drop in the dollar’s value and the federal government would be forced to pay higher interest rates to attract more investors.
Higher interest rates leads to an even higher national debt. For FY2009, the federal government paid $190 billion in interest. If our total debt rises to $17.1 trillion as the Congressional Budget Office predicts, our interest would quadruple to almost $800 billion by 2019. In comparison, the budget for the state of Oklahoma for FY2009 was $7.1 billion. So the federal government’s interest in 2019 would be more than one hundred times the state budget of Oklahoma.
Even worse, higher interest rates on T-bills and T-bonds would increase interest rates across the board, resulting in higher rates on loans to buy a home or to expand a business, which can lead to fewer new jobs and a decrease in our overall economy. In addition, the continued decrease in the dollar would cause the price of imported goods to rise, increasing costs for consumers, thus increasing inflation.
While I know there are economists who stand by the president’s plan to spend, spend, spend, I think that we must look down the road to see the real long-term effect it will have. Fiscal responsibility cannot just be a catch phrase used during elections. It must be a philosophy that we practice. If not for us, then at least for future generations on whom we are saddling this enormous debt.