A small news item from last week did not get enough attention. It is an item that is crucial to the national economic health but largely ignored by those running for national office. It seems the national debt blew past $19.5 trillion with a blink of the eye. This is after it broke the $19 trillion mark on January 29, just a bit more than 7 month ago.
It is almost hard to believe the total debt was $10.63 trillion when Mr. Obama took office. So, that means it has almost doubled during his painful time in office. The Congressional Budget Office earlier had reported the debt-to-GDP ratio would match levels by the end of the current fiscal year not achieved since 1950. A real CEO would have been fired for such fiscal mismanagement.
While declining in overall magnitude in the last few years, the annual deficits are expected to balloon again in the coming years, a not unexpected result. Under the Administration of Mr. Obama deficits exceeded $1 trillion a year on multiple occasions and only recently they hovered around $500 billion a year. A reduction to $500 billion is nothing to boast about. The total national debt when Obama mercifully leaves office in January is expected to approach $20 trillion.
With interest rates expected to rise, the cost to the government (which means us) just to service the debt to pay interest will dramatically increase, this increasing the deficit more.
Mr. Obama has left a burdensome legacy. A lover of big government, high taxes, and income transfers, he has will be leaving a legacy for others to suffer through. The Congress also deserves some of the blame. Failure to incrementally work something out on long-term entitlement spending and then changing the 2011 long term spending limit has contributed to the red ink.
There is no good news here and eventually circumstances will force the matter and it will not be pleasant.