The national debt is currently $8.3 trillion , and Congress just approved a $781 billion increase in the government’s debt limit, raising the ceiling for the fourth time in Bush’s presidency. Previous increases of $450 billion in 2002, a record $984 billion in 2003 and $800 billion in 2004 have all contributed to the statutory debt limit rising more than $3 trillion since Bush took office.
Senator Kent Conrad (D-N.D.), the ranking Democrat on the Senate Budget Committee, insists that Congress’ latest approval should be a wake-up call to everyone in the House, Senate as well as the President. “The question is: Are we staying on this course to keep running up the debt, debt on top of debt, increasingly financed by foreigners, or are we going to change course?”
Can the U.S. keep up this type of spending? Economists believe the national debt is more ominous today than it was in the 80’s, when hitting the one-trillion mark gave rise to national apprehension about deficits. According to Alice Rivlin, former vice chair of the Federal Reserve, “the situation now is really very different from the 1980s. As the costs of programs such as Medicare rise, we can’t go on into the next decade … still running deficits as our major way of coping… In the next decade the upward pressure on federal spending is going to be very, very large.”
While the Bush administration has acknowledged that it won’t come anywhere close to meeting its goals of reducing the defiict, it has no plans to let up on defense and national security spending, putting Congress in a difficult position. Senate Finance Committee Chairman Charles E. Grassley (R-Iowa) is fully aware of the astronomical pace at which the deficit continues to move. But “without an increase in the debt limit, our government will face a choice that we shouldn’t make and we wouldn’t want to make, a choice between breaking the law by exceeding the statutory debt limit or, on the other hand, breaking faith with the public by defaulting on our debt.”
Ironically, Canada’s net worth just hit $4.5 trillion, making it worth exactly half on the U.S. national debt.