One of the side-effects of the lengthy debt ceiling debate and downgrade coverage was the exhaustive and widely publicized focus on the country’s ugly mounting debt load as well as the key factors and trends that will drive the burden dramatically higher in coming years.
It should come as no surprise that the populace is disgusted given the whopping numbers and extraordinary rate of change… total government debt was a $10 trillion in late 2008 when all the hubbub was made about needing to add an additional digit on to the Durst debt clock in New York’s Times Square.
A mere two and a half years later and Washington DC pushes the economy to the brink bargaining over an increase in the debt ceiling allowing for the current $14.3 trillion in gross government debt.
That’s a massive increase of $4.3 trillion (a 43% increase) in just about 35 months or an average increase of $123 billion per month or roughly $4.1 billion per day.
And it’s not as if we are experiencing robust growth in the economy that could work to, in a sense, mitigate the mounting debt, our economic growth has been abysmal at best with GDP increasing ever so weakly.
So, the debt is simply piling up as policy junkies in Washington DC and elsewhere continue to push their failed Keynesian experiments in a supposed attempt to “boost aggregate demand” and address the high unemployment rate.
Given that these fraudulent policy schemes and boondoggles provided very little benefit and came at the cost of a downgrade to our sovereign credit rating, it is now time for Washington DC to do a complete about face and begin implementing major austerity.
In fact, given the specter of further downgrades as soon as this November by S&P and the looming possibility that Fitch and Moody’s may soon slash their assessments of U.S. sovereign debt, an effective approach to austerity is truly mandatory.
Ignore the policy junkies and their scare tactics, their archaic methods have been tried and failed.
The only way forward is to end all the preposterous policy action, clean up the government balance sheet, and let the chips of reality fall where they may.
