$8,363,536,754,922.  That is the current national debt of the United States, and the number increases by about $1.54 billion every day.  With an estimated population of 297,270,597, each American’s share of this $8 trillion debt is about $28,039. Unfortunately, because of rapid debt-financed spending by the government, continued tax cuts, and an aging population, people in their teens and 20’s will bear the brunt of responsibility for financing this growing national debt. While young people are paying for their education, saving for a home, and starting an adult life and family, our country is producing an enormous additional burden for them. 

Last month, President Bush signed legislation increasing the ceiling of the national debt to $9 trillion, the fourth increase of his presidency.  The Congressional Research Service (CRS), a nonpartisan government research agency that is part of the Library of Congress, reports that the current deficit represents a dramatic turnaround since the nation’s budget surplus in 2000. Tax cuts accounted for about 45% of the decline in the federal budget between 2000 and 2004. The downturn in the economy and temporary factors were responsible for about 38%, while increases in federal expenditures, primarily for the military, accounted for 17%.

Meanwhile, we are a nation of increasing population with great responsibilities, especially considering the approaching retirement of the baby boomers.  By 2025, a 76% increase in the number of people 65 and older is expected, presenting our nation with significantly increased obligations in Social Security and Medicare spending.

Social Security and Medicare are financed primarily by payroll taxes collected from today’s workers. If changes are not made, the total payments through these programs will grow much more rapidly than the revenues as the number of retirees increases compared to the number of workers. For example, when the Social Security system began in 1935, there were 42 workers paying taxes for every Social Security recipient. In 1950, there were 16 workers per recipient. Now, there are 3.3 workers per recipient, and by 2040 that number is projected to drop to two due to the retirement of baby boomers, declining reproductive rates, and increasing life expectancy.

Additionally, national health care spending is expected to continue to grow.  Health care now accounts for about 13% of our nation’s gross domestic product, and is expected to reach 16% by 2014 if current trends continue.  This means that health care spending will increase disproportionately compared to other spending, yet there will be fewer people to pay for it further burdening younger generations.

Paying down the national debt would save our government an exorbitant amount just in interest payments.  In 2005, interest on the $8 trillion debt was about $180 billion. It is estimated to be $200 billion this year. To whom do we pay that interest? About 44% of our debt is financed by China, Japan, Saudi Arabia, South Korea and the UK.  The rest is held mostly by domestic investors, state and local governments, and the Federal Reserve System, the central bank of the United States.

So, what can be done to stop debt-financed spending and begin to pay the debt down, as we were doing as few as five years ago? The Bush Administration and the Congress must learn to live within our means.  It is unrealistic to think that we can continue to borrow and spend as we currently do when we have obligations in Iraq and Afghanistan for a combined weekly total of about $5 billion.  Tax cuts, the cost of defense and an overall increase in expenditures has resulted in fewer federal receipts. An aging population, increased life expectancy, and retiring baby boomers have resulted in fewer workers to fund our nation’s commitments.  We cannot continue doing the people’s business this way.

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