|The Deficit in Perspective|
|Thursday, 14 July 2011 17:54|
As the debt ceiling debate fills all available media time, much of it falls on talks of the deficit. Deficit reduction is inherently tied to debt reduction)(or at least, debt management), for the debt is nothing more than the cumulative sum of all deficits. Run a deficit, the national debt (and thus the required debt ceiling) increases; run a surplus and the debt falls. To talk of the debt and ignore the deficit is impossible, for the debt is the child of the deficit.
Given this I thought it would be instructive to take a new look at just how big the deficit really is. And I thought I would do it in a way I've never seen before.
We hear about the big deficit; the deficit is the sum of all money the Federal Government has to borrow to cover what it wants to spend, for an entire budget year. The budget year (well, when there IS a budget - Senator Harry Reid and the Democrats have not allowed a Federal budget to be passed for nearly 2.5 years) runs from October 1 to September 30. Thus, as I write this, we are in the final quarter of the Federal budget year. And so far this year (as of the time of this posting) the deficit - monies spent that we do not have income to cover - is $1,393,580,000,000. Yes, one point four trillion dollars. and that is over the first 41 weeks of the 52 week year. Extrapolating out, our debt will be $1,767,467,000,000 - nearly one point eight trillion dollars.
So how do we put that number in perspective? Here is a way that I think is quite instructive, and is a twist on the usual "percent of GDP". Let's rate the deficit - the excess money that the Federal Government is borrowing and spending - as its own GDP.
In terms of GDP by the International Money Fund, we find the following list of countries by GDP:
USA: $14.66 trillion
China: $5.88 trillion
Japan: $5.46 trillion
Germany: $3.31 trillion
France: $2.58 trillion
UK: $2.25 trillion
Brazil: $2.09 trillion
Italy: $2.06 trillion
Canada: $1.57 trillion
India: $1.54 trillion
That is the list of the top 10 countries by GDP. Of the 204 sovereign states on Earth, and excluding the source of our deficit (ourselves), there are only 7 nations with a TOTAL GDP greater than our deficit. Of the other 203 nations on Earth, 196 have total, annual economic output and activity LESS than the excess money we're spending.
Our deficit spending - the money our Federal Government has to borrow to cover what it wants to do - is GREATER than the sum economic total of our neighbor to the North (and largest source of our imported oil), Canada. India, with a population somewhere around 1.1 BILLION people (about 4 times the US) has a total economic output LESS than the IOUs we're placing. The entire of GDP of the Continent of Africa - source of so many previous metals, stones, and commodities - is LESS than our borrowing.
And our President wants to ignore this. He chooses to demean and attack the GOP for trying to cut spending. He wants more taxes, and an even higher debt ceiling so as to continue his wanton, profligate spending ways. Remember this little essay the next time you hear the President or the Democrats talking about how the GOP wants to cut Social Security for your grandparents, about how they are being unreasonable. For a logical, rational person would find NOTHING reasonable about the actual facts of the deficit facing us - it is simply insane to NOT cut as deeply as possible to reign back in this monster that - if counted as its own "economic" block - would place it in the top 8 in terms of worldwide size.
|Last Updated on Thursday, 14 November 2013 17:32|