While the intellectual brain-trust focus on the paltry $85 billion in cuts brought on by the sequester Robert Samuelson took a look at the nation’s true national debt:
1) Treasury debt held by the public: $11.3 trillion, 73 percent of GDP for fiscal 2012. This is the most common measure of the national debt. Reflecting past annual deficits, it represents what must be borrowed through sales of Treasury bills, notes and bonds. In 2007, the figures were only $5 trillion and 36 percent of GDP. Today’s levels — as a share of GDP — are the highest since World War II’s immediate aftermath.
(2) Gross federal debt: $16 trillion for 2012, 103 percent of GDP. This definition includes the “debt held by the public” (above) plus the Treasury securities issued to government trust funds, the largest being Social Security. Economists dislike this debt concept, because the trust-fund Treasury securities represent one part of the government owing another. It’s comparable to lending yourself money. Congress could cancel these debts, though it almost certainly won’t. The trust-account Treasury securities represent political commitments more than financial obligations.
(3) Federal loans and loan guarantees: $2.9 trillion in 2011, 19 percent of GDP. The government makes or guarantees loans to college students, farmers, veterans, small businesses and others. The face value of most of these loans don’t show up in the budget, but the government is on the hook if borrowers default. Adding this debt (19 percent of GDP) to gross federal debt produces a total debt ratio of 122 percent of GDP.
(4) Fannie and Freddie: $5.1 trillion, 33 percent of GDP. The government wasn’t legally required to cover the debts of these “government sponsored enterprises” — the major lenders to the housing market — but almost everyone assumed it would if they got in trouble. That happened in September 2008. With Fannie and Freddie, the total debt ratio rises to 155 percent of GDP.
(5) The Federal Deposit Insurance Corporation: $7.3 trillion, 47 percent of GDP. That’s the insurance protection on bank accounts up to $250,000. Including the FDIC brings the total debt ratio to 202 percent of GDP.
But the left and the media would have you believe the cuts in the sequester are what’s going to hurt the country.
The sequester doesn’t even begin to address the problem. But hey! Now that we have food stamps for pets, how long will it be before Republicans are accused of wanting to starve puppies and kittens.
Boy, I hate Mondays.