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How the budget deficit endangers the U.S.
St. Augustine.com
By PETER GUINTA
April 16, 2006

EDITOR'S NOTE: Senior Writer Peter Guinta recently earned a Knight Foundation fellowship at the University of Maryland to explore with Washington policy makers the threats to the United States. The following article, the second in a weekly series, is the result of that fellowship.

COLLEGE PARK, Md. -- The biggest danger to the U.S. in the next decade will not come from al-Qaida, illegal immigration, bird flu or Iran but from the huge national debt that has the potential to bankrupt the country.

David Walker, comptroller general of the United States, said the nation's budget deficit is "large, imprudent and unsustainable.

According to the Bureau of Public Debt's Web site, which tracks the U.S. debt to the penny, as of April 10, the U.S. had borrowed $8,402,073,299,705.08.

That's $8.4 trillion if the commas are confusing.

About 37 percent of that was to foreign investors.

Walker said only about $100 billion of that amount has to do with Iraq and Afghanistan.

The real cause of the mounting deficit is the meteoric rise in government spending coupled with the Bush Administration's tax cuts, he said.

In 1965, 66 percent of the U.S. budget was discretionary, meaning Congress could use that amount for whatever it wanted. By 1985, that had dropped to 44 percent, and in 2005 it was 39 percent.

"Now, most of the budget's on autopilot," Walker said.

He tried to bring the numbers down to the level of the individual or family.

"The total net worth of all Americans is about $50 trillion," he said.

But the country's unfunded liabilities -- what the government owes plus what it has promised to pay but does not yet have the money for -- is $46.4 trillion in 2005.

"That's $156,000 from every person, $375,000 from every worker, or $411,000 from every family," Walker said. "People say, 'We'll grow our way out of it.' But anybody who says that has failed math. We're building debt, both as individuals and as a nation."

The effect of this huge debt is that the government must then pay a staggering amount of interest, taking billions of dollars from other necessary commitments, such as Medicare and Social Security.

"Every aspect of government will feel the pinch," Walker said. "Interest rates will increase dramatically, out debt will compound, there will adverse effects on our economic growth and quality of life, and it will threaten our national security."

How to fix this spiral downward? Walker says Congress needs to impose budget controls, improve the economy and economic reporting, re-engineer the entire base of government and reform entitlement and tax programs.

The Defense Department, for example, uses 4,000 different computer and procurement systems and therefore cannot be audited.

"It is the only branch of government that cannot be audited. It's No. 1 in fighting, but gets a D on economy, efficiency, transparency and accountability," he said. "Its plans are wants rather than needs. Every dollar we spend on a want is one we won't have for a need. Tough choices are not being made."

For example, raising the pay and benefits of soldiers and sailors is always popular, but the annual cost has reached $158 billion and growing, with average pay near $50,000 and some individuals making $112,000 a year, he said.

Another example is the new F-22A Raptor, probably the most advanced fighter in the world.

The DOD's initial request was for 648 planes at $81 billion. Later, the DOD lowered that to 181 planes for $65.4 billion.

"The question not asked is: Who are we going to use these against?" Walker said.

On an advanced aviation Web site, Lt. Col. Jim Hecker, USAF, said the Raptor is "a stealth aircraft and has the ability to super cruise, which is to go supersonic, and its extremely maneuverable. When we go out to fight it means we guarantee all (war fighters) that we won't be attacked from other airplanes, and we've been able to guarantee that for 52 years. The F-22 will go up against new, developing planes."

The Air Force plans to sell some Raptors to allied countries. So far, only Japan is interested, the Web site said.

Walker said the DOD needs better budget discipline and spending caps. "There are too many people vested in the status quo, he said."

If nothing is done, Walker predicted a two or three times increase in the federal income tax. "That would cripple our economy," he said. "When are we going to start recognizing reality?"

He said he's presented these gloomy predictions to President Bush and the Congress.

"I've not had one person on either end of Pennsylvania Avenue disagree with me," he said. "(But) when we start talking about specific proposed actions, that's when things come apart. Someone's got to present the facts and raise the alarm so we can start making tough choices."

TEXT:

Please use with Peter's mug, like last week Also, change the bio box to say that he earned a Knight Foundation fellowship at the University of Maryland to explore with Washington policy makers the threats to the United States.

COLLEGE PARK, Md. -- The biggest danger to the U.S. in the next decade will not come from al-Qaida, illegal immigration, bird flu or Iran but from the huge national debt that has the potential to bankrupt the country.

David Walker, comptroller general of the United States, said the nation's budget deficit is "large, imprudent and unsustainable.

According to the Bureau of Public Debt's Web site, which tracks the U.S. debt to the penny, as of April 10, the U.S. had borrowed $8,402,073,299,705.08.

That's $8.4 trillion if the commas are confusing.

About 37 percent of that was to foreign investors.

Walker said only about $100 billion of that amount has to do with Iraq and Afghanistan.

The real cause of the mounting deficit is the meteoric rise in government spending coupled with the Bush Administration's tax cuts, he said.

In 1965, 66 percent of the U.S. budget was discretionary, meaning Congress could use that amount for whatever it wanted. By 1985, that had dropped to 44 percent, and in 2005 it was 39 percent.

"Now, most of the budget's on autopilot," Walker said.

He tried to bring the numbers down to the level of the individual or family.

"The total net worth of all Americans is about $50 trillion," he said.

But the country's unfunded liabilities -- what the government owes plus what it has promised to pay but does not yet have the money for -- is $46.4 trillion in 2005.

"That's $156,000 from every person, $375,000 from every worker, or $411,000 from every family," Walker said. "People say, 'We'll grow our way out of it.' But anybody who says that has failed math. We're building debt, both as individuals and as a nation."

The effect of this huge debt is that the government must then pay a staggering amount of interest, taking billions of dollars from other necessary commitments, such as Medicare and Social Security.

"Every aspect of government will feel the pinch," Walker said. "Interest rates will increase dramatically, out debt will compound, there will adverse effects on our economic growth and quality of life, and it will threaten our national security."

How to fix this spiral downward? Walker says Congress needs to impose budget controls, improve the economy and economic reporting, re-engineer the entire base of government and reform entitlement and tax programs.

The Defense Department, for example, uses 4,000 different computer and procurement systems and therefore cannot be audited.

"It is the only branch of government that cannot be audited. It's Number One in fighting, but gets a D on economy, efficiency, transparency and accountability," he said. "Its plans are wants rather than needs. Every dollar we spend on a want is one we won't have for a need. Tough choices are not being made."

For example, raising the pay and benefits of soldiers and sailors is always popular, but the annual cost has reached $158 billion and growing, with average pay near $50,000 and some individuals making $112,000 a year, he said.

Another example is the new F-22A Raptor, probably the most advanced fighter in the world.

The DOD's initial request was for 648 planes at $81 billion. Later, the DOD lowered that to 181 planes for $65.4 billion.

"The question not asked is: Who are we going to use these against?" Walker said.

On an advanced aviation Web site, Lt. Col. Jim Hecker, USAF, said the Raptor is "a stealth aircraft and has the ability to super cruise, which is to go supersonic, and its extremely maneuverable. When we go out to fight it means we guarantee all (war fighters) that we won't be attacked from other airplanes, and we've been able to guarantee that for 52 years. The F-22 will go up against new, developing planes."

The Air Force plans to sell some Raptors to allied countries. So far, only Japan is interested, the Web site said.

Walker said the DOD needs better budget discipline and spending caps. "There are too many people vested in the status quo, he said."

If nothing is done, Walker predicted a two or three times increase in the federal income tax. "That would cripple our economy," he said. "When are we going to start recognizing reality?"

He said he's presented these gloomy predictions to President Bush and the Congress.

"I've not had one person on either end of Pennsylvania Avenue disagree with me," he said. "(But) when we start talking about specific proposed actions, that's when things come apart. Someone's got to present the facts and raise the alarm so we can start making tough choices."

Original Text

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