It was once considered Americans’ patriotic duty: enduring extraordinary tax increases in wartime to help finance the fight.
Not today. Iraq is the only major U.S. conflict, except for the 1846-48 Mexican-American War, in which citizens haven’t been asked to make a special financial sacrifice. President George W. Bush opposes tax increases, even as the costs escalate far beyond predictions and he calls for more troops.
“It’s a reflection of either a lack of public support for the war or perhaps an unwillingness of the Bush administration” to test its popularity, said Elliot Brownlee, an economic historian retired from the University of California, Santa Barbara.
And the result of this is simple:
Once again, debt issuance is increasing at an alarming rate. Don’t believe a liberal blogger? Fine. Go to the Bureau of Public Debt.
According to the them the US’ total debt on September 30, 2001 was $5,807,463,412,200.06. This total was $8,506,974,000.00 on September 30 2006, for an increase of 46.47%. Over the same period (September 30, 2001 to September 30, 2006), total US GDP increased from $10.135 trillion to $13.322 trillion or an increase of 31.44%. In other words, the debt is increasing faster than US GDP — and not by a small, statistically insignificant amount. Debt is increasing about 15% faster than GDP over the last 6 years. In addition, the US debt/GDP ratio has increased from 57.29% in September 2001 to 63.84% in September 2006.
Over the last 4 years, the US Treasury has issued over $550 billion in net new debt per year for the last 4 years.
At this point, the supply-side will offer the following response: “But Bonddad! The deficit is decreasing!”
Well — yes, but only if you think Enron style accounting is a valid way to report the Federal government’s situation. The oft-quoted decrease in the deficit is the result of including the Social Security surplus in the calculations. The problem with this is instead of actually saving that money the government is spending it. When you go to the Bureau of Public Debt, you will notice that increase in “intra-governmental debt”. Think of this as money that should be in the Social Security Trust Fund that instead is being spent on other things. Basically, Bush is using Social Security taxes to pay for Iraq.
So we have a situation where the top 10% are getting literally everything they want. And everybody else gets hosed.