By Robert H. Linnell
In discussing government debt there has been confusion of terms leading to manipulation by politicians and pundits of all stripes. Last month the U.S Treasury made changes to help avoid confusion; their monthly reports will now be called: Monthly Summary of Treasury Securities Outstanding . The term "Total Treasury Securities" will represent the total government debt, held in two major categories: Total Marketable (Publicly traded debt), currently being paid down and Total Nonmarketable (primarily trust funds like Social Security, Medicare and government pension funds for military and civil servants) which are increasing. Total Treasuries Outstanding continues to increase:
Total Treasury Securities, 02/28/01 $5.736 Trillion
Total Treasury Securities 09/30/00 $5.674 Trillion
Increase in Debt This year to Date $62 Billion
This debt has been increasing for years. When Ronald Reagan became President, Total Treasury Securities stood at $1.029 Trillion (12/31/81). George H. Bush started his Presidency with debt of $2.602 Trillion (09/30/88). Bill Clinton became President with debt of $4.065 Trillion (09/30/92) and left with $5.674 Trillion. The Congressional Budget Office rosy surplus projections still show Total Treasury Securities increasing to $6.737 Trillion by 2011. This projected future debt is based on severe limitations on spending, which are highly unlikely, as well as using surplus to payoff debt. The actual debt will almost certainly be much larger due to tax cuts and increased spending.
The highly publicized $5.6 Trillion budget surplus comes from the January 2001 CBO report (The Budget and Economic Outlook: Fiscal Years 2002-2011). Reading the CBO report one finds many cautionary statements ever mentioned by the tax cutters. For example: "The favorable outlook for the next several years, however, is subject to considerable uncertainty. Final outcomes...will differ, perhaps significantly...A downturn in the economy ...could greatly diminish or even eliminate surpluses over the next few years." CBO then issues a warning: "Near turn surpluses do not change the underlying dynamic driving the long-term budget outlook. Over the next 40 years the number of workers will increase by 18% but the number of Social Security and Medicare beneficiaries will almost double...boosts in life expectancy...will increase the costs of long term care...Medicare costs will increase faster than the economy...If federal policies did not change in response to these trends, high deficits would return and eventually drive federal debt to unsustainable levels."
The Bush Administration tells us we have a $5.6 Trillion surplus, that we are being overtaxed and therefore the money should be returned to those who earned it. This is simply not true. Almost all of this "surplus" is pension and health care money that belongs to future retirees in Social Security, Medicare/Medicaid, our military and our civil service employees. Many years ago Congress passed legislation requiring private companies to separate pension funds, in a secure and responsible way, from their operating funds.
Congress has not done the same for public pension and health care funds. The Congressional "lock box" is a joke, as there is no box and no key necessary; they just write more IOUs. Tax cuts now, becoming ever larger beyond the tenure of our current President and and his administration as well as all Congressmen, will lead to disaster in the future as CBO warns us. We take seriously all of the CBO report and not just the big surplus numbers. We urge our fellow Americans to look at the real numbers and not be taken in by the political rhetoric. Our common future is at stake.
(Reproduced with permission from: www.my-oped.com.)