Having reached the so-called “Debt Day” on April 26, the federal government is officially out of money. It’s not surprising when you consider the most recent expenditures pushed through the Congress to strengthen the weakened economy. With a $787-billikon stimulus package and almost $3.6-trillion for the new budget, you start to get an idea.
The national Debt Day is the point in time when the federal government has spent more than it take in as revenue for the fiscal year. As a result, any expenditure by the government will be reckoned as debt and added to the national debt figure.
This year’s debt day is falling three months earlier than it did in 2008; it is not a good sign for the direction of the national debt. Economist John Quinn is quoted as saying “We’re going to be expending roughly 40 percent of the GDP, which is unprecedented in peace time, on federal and state programs over the next two or three years.”
Quinn, also the president of National American University went on to say that “We cannot finance these huge deficits, these trillion-dollar and trillion-dollar plus deficits indefinitely without raising taxes.”
Much criticism has been leveled against the Obama Administration for its continued spending. Still, the promise Obama made to cut the federal deficit in half by the end of his first term has not been taken back.
“My administration has also begun to go line by line through the federal budget in order to eliminate wasteful and ineffective programs,” President Obama said in February during his State of the Union Address.
Even as more US citizens attempt to reduce their personal spending and the prices of homes continue to drop, the problems with the economy’s woes are worsening due to the decline of consumer sales and property tax revenues.
Economists of every strip suggest that continue government growth at current rates may not be sustainable for much longer. The bigger a government grows the less efficient and potential corrupt it becomes. Some point back to the eras of Thatcher and Reagan for proof that a new direction in government shrinking may actually be on the horizon-out of necessity.
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