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  • Where Is Our Debt Coming From?

    Spending. As Heritage Foundation Senior Policy Analyst Brian Riedl explains, runaway federal spending is where our historic levels of debt are coming from. Watch:

    And as Reidl mentions, as fast as spending has been rising this century, thanks to our long term Entitlement obligations, our spending and deficit problems will only get worse:
    entitlements_03-580

    Posted in Economics [slideshow_deploy]

    45 Responses to Where Is Our Debt Coming From?

    1. Randy,SA TX says:

      brian, do u only do an analyst when or prez is a dem. sound like ur trying to scare some support for ur agenda.

    2. Wildcat from Dallast says:

      In my assessment you need to look deep into the details of these entitlements (as well as those not mentioned), determine what congressional and/or presidential actions worsened our deficit situation relative to the creation and modification of these entitlements and then develop and implement a well thought out viable plan to rectify this situation first, then enact legislation to prevent an unnecessary reoccurrence.

      Begin with the entitlement programs as they are today and their current associated financial status. Identify the root causes for this situation such as former President Jimmy Carter’s granting social security, Medicare and Medicaid benefits to illegal immigrants. These people came here illegally, did not contribute a cent to fund these programs therefore they should not have reaped any benefits from them. While we cannot recapture the lost funds we can prevent future unauthorized spending by repealing that action.

      When then Vice President Al Gore rendered the tie breaking vote to tax social security payments on contravention to what FDR articulated in the original intent upon inception. Repeal that action.

      When a democratically controlled congress enacted legislation to take money from the social security trust fund and place worthless “IOU’s” that were never repaid it exacerbated the problem. Once again you can’t go back and undo the flawed action but you can stop it from happening from this point on. Additionally, the plan for America to fund routine operations and maintenance and the few entitlements that could deliver worthwhile services has to change. We must have cogent reasoning skills and think outside the box to solve this one.

      How about we elect reasonable American citizens to develop and implement plans and policies that can easily pass the common sense test first? Then, we make them actually read the bills into the record and personally read the bill before voting on it? Now, what if we did what businesses did during WWII when there was a wage/salary freeze in effect and have them deduct the costs of workers (and their legitimate family members) health insurance premium costs as one aspect of doing business. Then, allow American citizens to create health savings accounts at the rate of $5,000 per family per year member that can have unused amounts rolled (tax free) into the next year and so on for life. Eliminate the individual income tax and implement the Fair Tax (as developed by Neal Bortz). Now enact a 4% added value tax with the proviso that 2% gets applied directly to the principle of the debt and the remaining 2% gets applied directly to paying off the paper IUO’s needed for social security, Medicare and Medicaid. Increase the Medicare/Medicaid payment amounts to a reasonable amount and incentivize medical students to become doctors who must accept Medicare/Medicaid patients or face astronomical annual fines in addition to repaying any government assistant provided that covered their medical school costs.

      In addition to these changes incentivize the purchase and use of Medicare Supplement insurance, Accident Insurance and Long Term Care insurance provided they purchase the lifetime benefit period, at least over the cost of the most expensive skilled nursing unit (dementia care) and have the inflation rider for the American taxpayers. The incentive would be no tax on premium dollars and no tax on the benefits received. Change the Medicare and Medicaid rules to pay for only the first month (or two months) of the nursing home stay which would cover the routine “elimination period” when the costs for care are the least thereby limiting the governments unfunded entitlement liabilities when they are enormous and growing.

      Those are just a few cogent thoughts on the matter.

    3. Stirling, Huntingdon says:

      Randy.. see economics 101 class. If you spend more then you take in this is bad. When government continues to spend what we don't have it's worse. When the governments credit card maxes out and nobody will lend us money we are done. Heritage would point this out reguardless of who is the one jacking up our debt. :-)

    4. Randy,SA TX says:

      really,can u plz tell me when was the last time an article was written about military spending,big biz spending, foreign aid spending under the last prez?

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    6. Karen, West Jordan, says:

      What a strange accusation to make. Riedl began by pointing out the irresponsible spending by the Bush administration, then talked about Obama's as well. Party loyalty really blinds people.

      What this piece does not point out is the complicity of our corrupt Congress in the legal counterfeiting that is being done by the Federal Reserve. THAT is what is bankrupting our country and quietly robbing us of our wealth. THAT is why a man must work for 30 YEARS just to pay for his home. We must elect patriots to as many congressional seats as we possibly can who will vote to abolish the Fed and restore our long-lost constitutional liberties.

    7. Jack, Tucson, AZ says:

      Trying to read a couple of the comments requires some translation. I guess the respondents are used to texting on their cell phones. I noticed that those who either can't or won't use standard English have a strong liberal bent. It's obvious these individuals are products of our school system which is more concerned with how students feel than what they learn.

    8. Ken Allison, Tyler, says:

      This is beyond reason. The country is essentially insolvent and we continue to argue about blame rather than fixing the problem. R's overspend and D's overspend (just more!). The result, however is the same. The only way to maintain our Republic is to force the feds back within the bounds of the Constitution. And we'd all better get on board with this peaceful revolution or we will become the next Venezuela or Zimbabwe.

    9. Matt, California says:

      Worrying about the "party in power" being critisized truly misses the glaring point – this is unsustainable. Heritage, as well as the Tax Foundation and dozens of other groups, including the GAO, the CBO and some Congressman (Ron Paul) have been talking about the national debt for decades. Randy, you need to pull your head out of the sand (or wherever it is) and forget about your political party. This is something that will literally destroy this Country and the lives of our children and grand-children.

    10. Cherie, WA state says:

      All of the spending for Obamacare, Climategate, ACORN, bailouts, etc.is unnecessary. We need to spend money to keep us safe (military and anti-terrorism). This outrateous spending is being done on purpose to bring down our system of govt. This is truly scary. Something must be done to stop it.

    11. Cherie, WA state says:

      spelling error- outrageous

    12. Spiritof76 says:

      Randy, what difference does it make whether it is a Democrat or a Republican? The country is going down the tubes. Spending and entitlements are not sustainable. Those are simple facts. Either you cut spending or the country is sunk one way or another. Why do you worry about who is playing the fiddle when the house is burning? We have to realize that this is our America and we want our kids and grand-kids enjoy all the freedom and high standard of living without being subjected to crushing debt.

    13. r.heil- baton rouge, says:

      Now with the passage of the new health care bill, how can the expenditures for medicare increase so much. not much has been said about what are the actual numbers of items in the health care bill that are not related to health care? the GOP should be jumping on this with both feet to inform the american people of the non-related health care items and what their cost will be and where will the revenue come from. If there are any wise people in Washington DC, they evidently are not members of the house or senate.

    14. Chris, Newtown says:

      randy, his point is that the 3 big entitlement programs will, as people age, far exceed our countries' ability to pay for them. comparatively, the wars, big biz spending, etc are supposed to be short term events to achieve an end purpose.

      entitlements never go away, they just keep getting bigger and bigger. and as people live longer, they last longer as well.

      so maybe yobama has a plan – shorten lives with his top secret health care program and that also decreases entitlements. brilliant!

      except for the surge in govt jobs to run all these healthcare programs which then will require union employees and lifetime entitlement programs for them…

      maybe not so brilliant…

    15. Bill Thompson, La Fe says:

      Interesting to see that folks like Randy (an obvious Obama chat monitor) always talk about military spending and the "last prez." Go back and look at the label on the graph and see that it only talks about SS, Medicare, and Medicaid, all of which are scheduled to skyrocket.

      If you don't think taxes are going up you better think again.

      My 2¢

    16. Good Lt. says:

      Randy, cn u plz typ English and not teenage Intrawebz lolcatz jargon. thx.

      If you watched the video, he criticized Bush's spending, too.

      Obama has doubled it. If it was wrong for Bush to spend lots of our money, it follows that it is doubly wrong for Obama to double the spending and debt – especially after he pledged fiscal responsibility when he campaigned.

      And what is "big biz spending?" Tax relief is not "spending." Wall Street bailouts, for example – authorized by the Democrat Congress from 2007 on – is spending. Congress controls the purse strings. The President can only request spending.

      Military spending is CONSTITUTIONALLY MANDATED. It is required by law. Obama's "stimulus" is not mandated. It's discretionary.

      Get a clue, plz.

      K. Thx. Bai.

    17. Norm Roth, Renton, W says:

      Randy, and your point is….what exactly, the chart is inaccurate? Let me assure you conservative/republicans have been warning about this crises not for years, but for decades. I suggest you go back to Barry Goldwater's 1964 book "Conscience of a Conservative". I am pushing 70, and have watched with dismay how my feckless generation have buried my children and grandchildren with unsustainable debt. It started with Lyndon Johnson, his "great society", funded at that time by bringing Social Security revenue into our government treasury to be spent immediately, while keeping the Social Security obligation of our "official" federal Government books. Every time a Republican would suggest we address the problem before it got out of hand they were accused by the Democrat party of wanting to destroy Social Security and Medicare. This while those same Democrats were actually doing the "destroying" by "Kicking the can down the road".

    18. Jeff, NC says:

      Randy. Sounds like you don't feel you are getting enough of the other people's money that you believe you are "entitled" to. Typical liberal democrat.

    19. rvastar VA says:

      Randy's asinine question: "can u plz tell me when was the last time an article was written about military spending,big biz spending, foreign aid spending under the last prez?"

      The answer: "all the time."

      Just because you're a Leftist hack who has probably never visited this site before, doesn't mean that The Heritage Foundation hasn't been publishing analysis like this. I've been getting information like that contained in the above referenced chart for years from Heritage.

      Not that any of that matters in the least, since your "argument" is simply a red herring – a favorite in the Lefty playbook, along with ad hominem, straw men, and tu coque arguments. Even if this were the first such analysis done by Heritage – which it's not – it's completely immaterial. What IS material is the validity of their analysis. Can you refute it? Thought not.

      Now run back to Kos and HuffPo. Serious thinking is going on here.

    20. Harwood, Fairfax, VA says:

      Randy: Go to heritage.org, click on "Issues," and check the publications under "Social Security" or "Medicare." Heritage has been warning about the entitlement crisis for many years — all through the Bush administration, the Clinton administration, and earlier.

      This is not about the "current prez." It is about a budget crisis that we have to face. Stop trying to make it an issue of Obama vs. Bush.

    21. Dan, Sterling says:

      Fellow Heritage supporters, we shouldn't waste precious time or even thought on people like Randy. He'll never be convinced. He's been drinking the koolaid too long. I'll leave you all with two qoutes. Plato said "Wise men talk because they have something to say; fools, because they have to say something." I think Randy feels like he HAS to say something. And it was Einstein that said "Great ideas often receive violent opposition from mediocre minds." The Heritage Foundation is one of few that generates new ideas so we should expect opposition. Don't honor people like Randy with your well thought out responses. In November things will change.

    22. Jill Hetherington says:

      In addition to what Chris said about shortening life expectancies with Obama care is the government paid abortions that will lessen the population before they ever get born. It is not about helath and not about Care. We are in bigggg trouble.

    23. Scott, Ga. says:

      Bottom line, there are many issues here to look at but the real problem is the country and people are going broke! We cannot keep printing and waisting money on bogas programs.We have to bring the money already out there BACK into our country. There is plenty out there! The Fair Tax is the biggest single thing we could impliment that would get us back on track and we need to inform people every day about this. Our tax system is a big reason our country is going down the tubes! We can't compete with the international markets anymore. Even if we do buy goods in the US, LOOK WHERE MOST OF THEM WERE MADE!! Do you think they were given to us! WAKE UP AMERICA and start demanding American made products!!! The quality of USA products will also get better and better! Have a great day!

    24. Truthful James, Illi says:

      We know the problem, let's go towards a solution.

      1. At what real GDP rate of increase will the spending above hold at a constant percentage of GDP?.

      2. How can we sustain that rate of real GDP increase without ruinous inflation?

    25. Lil' DR San Ant says:

      Hahaha! I kept scrolling down to see Rando's response, but got nothing…lame. C'mon guy, you seriously have the lefty blinders on. We can't keep spending at this rate, it's unsustainable and a much bigger crisis than, oh I don't know…Global Warming!

    26. Richard, rural west says:

      randy you idiot, like everyone else on here is saying, learn to type English and not cell phone text crap, when you do maybe you will be taken seriously. All of us here in Texas have to ask are you a child, just ignorant or maybe English isn't you first language? Care to help us out here, hey when the Socialist or the Communist take over we won'thave to worry about little things like SS, Medicare, Medicade, or for that matter wars or security. So randy dig your own hole to live in you will need it!

    27. Jill, California says:

      I was no fan of President Bush, but on spending, I'll give him this much leeway … He had things occur during his presidency that required new spending that he could not have foreseen and that contributed heavily to our nation's debt.

      Take 9/11 as an example. Although we've always needed to provide for our national defense, we didn't anticipate anything on the scale of 9/11 and the wars that followed. Take Katrina. Although we've always needed to pay for disaster recovery, Katrina's costs were far out of proportion with anything we'd experienced before.

      I may not agree with all of President Bush's decisions, but his response to these financial obligations was not unlike the decisions each of us must make in our daily lives. Each of us manage our own finances based on anticipated expenses. When we're hit with large unexpected bills, perhaps because of an accident, an illness, or something else we can't ignore, it often causes us to go into debt (or deeper into debt). We can cut only so much from other areas as we try to recover. President Bush had the same challenge when hit with the nation's unanticipated expenses.

      I can't give Obama the same leeway I give Bush. Obama is spending recklessly, with no regard to how it affects taxpayers. And Obama repeatedly cries "emergency" to create excuses for spending. Healthcare, for example, is not a "crisis" that was unforeseen and is suddenly driving up our nation's debt. It's a need and expense we've been able to anticipate and plan around for a very long time. Bad planning and bad decisions don't make it a "crisis." Nor does the tremendous waste, fraud, and abuse that lawmakers are ignoring in the current healthcare bills.

      Obama's decisions are unwise, and his motives are questionable at best. Again, I was no fan of President Bush. But I'd rather have eight more years of President Bush than eight more minutes of Obama.

    28. DAN MOFFATT says:

      I believe that before these traitors in congress are allowed to leave a legacy of pain and suffering behind them.(these are the traitors that are not running again for their seats in congress).they should be forced to defend their actions to America in this disgraceful health welfare bill now being designed by the demo-socialists.This should be done by our Attorney General in concert with our congressional ethics committee.At the very least,some form of reform for these agenda driven traitors should be on the bill of fare before they leave.There should be accountability for their outrageous behavior.This should be extended to all future gatherings of the Rich and Infamous.

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    30. Louis L Cesar F Levy says:

      Stop spending, be more responsible and you will be attacked by our secular enemies IN and OUT, with ways and means not all can see and understand.

      The Enemy vowed to do so in his cryptic language thirteen hundreds years ago and is still sticking on his hidden Agenda.

      The FREEdom of Mind must be the first prerequisite of any candidate to public Responsability.

    31. Jeanne Stotler, wood says:

      One way to help would be to bring back savings bonds, as a kid I would take part of my allowance to the PO and buy stamps, when I had 18.70 worth of stamps, I would take them to PO with a nickel and buy a bond which in 10yrs would be worth $25.00, there were other denominations also available, this helped finance the war and aftermath, everyone I knew had bonds, many got them as gifts. This money should however only go toward the national debt not to the general fund like SS and Medicare.

    32. Marty Johnson, Chica says:

      Please do the same but include projected interest on the debt. The way we're heading I should guess that'll be at least 5% of GDP by the end of Obama's second term (!) and the curve will intersect the 18.5% line in the 2020s.

      I have been making the case to people for several years that in our lifetimes (I am 59) we will see the Federal govt reduced to little more than an insurance company (annuities and medical insurance), a bank (financing the debt), and a few underfunded public goods like national defense, courts and prisons, and some regulatory functions.

    33. philip says:

      Obama and the democrate house and congress has noconcept of 101 economic. That you canot spend more than you have. Obama with total disrespect of the taxpayer he ignores them,and keeps spending what he dose not have on bailouts,and many other programs we are putting in to place with funds we don't have. so without fiscal responceably you choose to print more money, raise our debt cealing, and then steal from us and future generation through taxation we cannot aford to cover your social bailouts that pad the likes of barny frank with no restrictios this is ware debt is coming from obamb you or your party seam not to understan the concept ecnomics 101

    34. Claude Cornell says:

      We got what we asked for. Sure hope we're not stupid enough to ask for it again. The real answer is to dump all the big spenders next Nov. and grab the feet of all the rest of the them and hold them very close to the fire.

    35. arthur saliba, dotha says:

      there are two sugestions that mr. carafano made in his list of ways to protect our country that really stood out to me. one is improve communication between all departments involved with national security that can be checked and crosschecked quickly and securely and a defence implimented in a speedy and timely manner without a lot of "hallabalu". the second suggestion is for a real id program that is tamper proof and contains a bar code or electronic chip that will make immediate verification secure and private and can be used and checked anywhere in the world. thank you, arthur saliba

    36. Diane Winkler, Papil says:

      Read all your comments. I especially like the chiding of Randy in Texas. If only he would respond.

      Everyone was right on (except Randy). The stimulus bill was so blatantly irresponsible, it did not specify what it was for. FYI: BO paid off Hillary’s campaign debt with the funds. This needs to be investigated as it can’t possibly be legal. The GOP needs to start acting instead of talking on C-Span regarding the problems they face with the Dems and their leader. They need to investigate the above, and file in Federal Court the unconstitutional positions of the czars. If they make policy decisions (which they have) then they are unconstitutional.

      Allowing civil court for terrorists is against rules of the Congress and needs to be challenged; mandating health care is unconstitutional. I could go on and on.

      BO doesn’t care. Some entity MUST challenge his actions. Throw PC out the window. This is a Republic and I want to keep it that way. Our reps HAVE GOT to protect American Citizens from these obvious violations. If we don’t do it now, we will lose our Republic and end up with tyranny!

      The Dems in Congress has publicly insulted the American People, their constituents. Guess they must have their head in the sand the same as Randy. Can’t wait for 2010 and 2012 elections.

      Most of us know what is needed: patriots in office. How do we accomplish this? Find out the patriot who is running for office, (via the internet) and mail them some money now and every so often if you can afford it. Money is always the bottom line. We can’t count on the GOP. Remember, we are fighting against ACORN and the like. They have endless taxpayer money! How ironic!

    37. Keith, Chandler, AZ says:

      We can put the blame on many presidents but Congress is the one that initiates spending bills. We have the power to change that with our vote. We need to elect only those who are willing to eliminate pork barrell spending and balance the federal budget, not by raising taxes only. I will not be alive in 2052 but those of you who will be and their offsprings will regret not doing something now. We need to start with this year's upcoming elections. No more excuses.

    38. Tom /Georgia says:

      The United States Federal Government is in the process of self-destructing.

      What next? Have our state and local governments now become so dependent on earmarked "subsidies" from the Treasury that they will all be sucked into the black hole that is created when the Federal government implodes?

      The fact that state constitutions forbid deficit spending by state and local governments hasn't done very much to keep them from over-spending: They get members of their state's Congressional delegation to ear-mark money from the Federal budget. That way the debt is being carried by the U.S. Treasury as the state and local government officials wipe their "noses" on their own states' constitutions.

      THEM AIN'T CHICKENS COMIN' HOME T' ROOST. THEM'S BUZZARDS.

    39. Dennis A. Social Cir says:

      The American people have become accustomed to the "guvernment" making decision for them, providing all their needs, and not having to worry about life in general.Many are very frank when they say the "guvernment" has to do something. I was raised to believe that my life was and will be what I make of it. I am responsible for myself and my family, but should help when people need help. That help was only to be to a point in time, then those that were helped must act in their own behalf to make their own way.

    40. Drew Page, IL says:

      We know where the debt is coming from, what we want to know is where the money coming from to pay off the debt. I think we all have a pretty good idea about that. I'm certain it won't come from the "savings" from national health care.

      I have a great suggestion, I say we cut the salaries and benefits of all those Senators and Congressmen who passed the bi;lls that put us into this debt. Those serving in the U.S. House and Senate should be given a salary of no more than the average working American (that would be between $35,000 and $50,000 annually). Their benefit plan should be no better than the average working American's and they should be subject to all the 'health care reforms' as the rest of us. Their pensions should come from Social Security, not from their special government pension plan that pays them 80% of the average of their four highest years of income. These people are constantly telling us what's good for us, I think we should return the favor.

    41. G Moreland, Holly Sp says:

      Great posts from everyone. The guys who don't have a clue or still cling to their support of Obama need to have a coloring book with examples sent to them or at least made available beside the Inquirer at the grocery store. They simply don't believe that our country can ever be in trouble due to excessive debt. I had a guy tell me yesterday, that he just couldn't see why the debt mattered…and I might add that he is a certified social studies teacher/history major.

      When one of the senators said the public doesn't care, I think he was talking about those who don't have the knowledge and forsight to see that if China owns enough US debt and they get bothered about payments, they can land on any day and take our/your stuff. I realize that is oversimplified, but some people have to be reached in simple ways.

    42. John Higgins Lowellv says:

      This nation is so screwed up it' is doubtful that it can be corrected. Like Rome,Spain, England, Greece, Macedonia, Persia, China, etc all great empires of the past it may be time to place our head between our legs and kiss our American ass goodbye. Yes it is that desperate,we are going over a cliff and free enterprise alone wont change it and socialism alone wont change it. Everything that humanity is involved in needs checks and balances. Everything mankind does needs regulations. The question is how much regulation and who does the regulating. Remember the golden rule? We either decide to change or keep repeating history.

    43. Bert,Ohio says:

      Ladies and Gentlemen: Trying to talk common sense matters to liberals (progressives) is as the Bible states is like casting your pearls before swine (fools). The only way to eliminate these threats to our liberty is at the ballot box. We need to find Men and Women who will defend our Constitution from our enemies both foriegn and domestic.

    44. David A. White says:

      Social Security is not an entitlement, it is money that I have invested for the last 50 years with interest.

    45. Enrique casas says:

      when you said that jimy carter granted benefits like social security, medicaid or medicaid to ilegals you are. not well inform there is no grants for ilegal inmigrants and I KNOW becouse I am one of them .

      stop laing.

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