The corrupt, profligate spenders won. The media cheered, The People lost.
The President and his media allies didn’t talk much about why America faced the so-called fiscal cliff. This chart shows why there is such acrimony in Congress. It took 22 years, from 1986 to 2008 for government debt owed to the public to rise 88%, after adjustment for inflation. Then, in the most recent four years it rose by 88% again.President Obama and Congressional Democrats’ only reaction to the alarming data in this chart has been to enact legislation that will require government to borrow even more.
Republicans gained a majority in the House of Representatives in 2010 by promising voters they would stop the massive growth in government borrowing, spending and debt that President Obama began to implement in 2009. Almost all of them were reelected on the same promises. But the Democratic Senate has blocked their efforts for the past two years, forcing their leaders to try, desperately, to negotiate a “grand bargain” directly with the President who presumably would prevail upon the Senate.
They were unable to reach any sort of compromise with the President except to kick the can down the road until the end of 2012. Thus, the fiscal cliff, a confluence of several can-kicking measures that all came due at the same time.
So, considering that spending driven debt were the reason for the fiscal cliff it would appear that the voters who elected Republicans to Congress have been treated with contempt. Obama’s so-called balanced approach turns out to be tax increases balanced with spending increases balanced with debt increases. The media are cheering of course because their celebrity President “won,” and Republicans who were trying to hold down spending and debt “lost.” Party on!Scary as it is, the chart at the top actually understates the debt crisis. It shows only one of the two categories of federal debt, that which is owed to “the pubic: American and foreign individuals, foreign and domestic financial institutions, foreign governments and the Federal Reserve. The other category is debt that is owed to “government accounts.”
The largest government accounts are the deceptively named Social Security and Medicare “Trust Funds.” For decades government has logged Social Security and Medicare Payroll tax revenue that was diverted to other programs as a “debt” owed to the Trust Funds. These fictitious debts the government supposedly owes to itself now total about $4.8 Trillion. The headline debt number usually reported by the media includes both the debt government owes to the public and to itself.