America Is Living In Debt

According to an Aug. 6, 2008 press release from the Congressional Budget Office, the national debt for the fiscal year of 2008 was $371 billion, with estimates of a year end total of more than $400 billion.

Government spending increased in all major categories. Defense spending increased 11.9 percent – from $438 billion in 2007 to $490 billion through 2008. Miscellaneous and otherwise non-categorized spending also increased by $96 billion, or 14.1 percent, largely due to the Economic Stimulus Act of 2008.

Perhaps the most important figure to note is the $4 billion interest increase on the national debt, which stands at $213 billion for fiscal year 2008.

The preliminary numbers for fiscal year 2008 show total government spending at $2.47 trillion, a $200 billion increase from the 2007 total. Actual revenue collected by the federal government was only 1 percent less than at this time last year, but outlays – payments, repayments, rebates, etc., made by the government – had increased 9 percent.

A major factor in the budget deficit for the year was the Federal Deposit Insurance Corporation – FDIC – which made nearly $15 billion in payments in July alone to cover federally insured deposits at failed financial institutions.

Upon review of the Congressional Budget Office numbers, it is clear that the government spent well beyond its means this year. Furthermore, tax revenue and receipts declined across the board. The government’s receipts on personal income were virtually the same as last year, only decreasing 1.6 percent, but its receipts from corporate taxes were vastly changed, decreasing by 14.4 percent.

These data reveal a disturbing propensity by this government to spend much more than it brings in, while continually decreasing corporate taxes which could otherwise pump money into a hopelessly indebted government. Fiscal responsibility demands that the government either increase taxes or decrease spending. The effect of ignoring both, or in fact doing the opposite of both, brings about the net result which we find ourselves in today. The United States is buried under decades of its own mismanagement, taking loans from foreign countries to cover its spending habits.

Living in debt is very dangerous, as evidenced by the recent worldwide credit-crisis, and that is precisely where this nation finds itself today. This nation cannot live on credit forever. It must be proactive to balance the budget and rein in its spending, or otherwise face the possibility of financial disaster in the future.

Source Congressional Budget Office:

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