The White House today slashed its forecast for this year's budget deficit by $127 billion, saying its tax cuts gave the economy a boost. President Bush welcomed the numbers as "good news for the American taxpayer." But is the news really that rosy?>
One thing you won't hear from the White House today is this number: $8,410,281,565,972.66. That's the total federal debt as of last Friday, and it's a huge number -- $8.4 trillion.
In fact, if we decided as a nation to do nothing other than pay off that debt, it would suck up every bit of U.S. economic output for almost eight months -- every penny saved, every paycheck, every sale of everything for eight months -- to pay it off.
The national debt has been growing at a rapid clip for most of the Bush administration. The president today was not talking about reducing the debt but about reducing the debt's rate of growth.
The deficit is expected to be $296 billion in the 2006 fiscal year. This is sharply lower than the $423 billion the White House projected when it unveiled its budget in February, but the numbers still represent a debt growth of nearly $300 billion for the year.
A Nation Adding to Debt
At the end of the Clinton administration and the beginning of the Bush administration, the debt was actually growing at a negative rate. That's right -- the United States was paying off some of this massive loan. The numbers show that the country has been adding to the debt (a positive growth rate) every day since June 27, 2001.
Today the government is adding an extra 7.2 percent of total borrowing to the debt each year. During the Bush presidency, the average rate of annual debt growth has been 6.7 percent. President Clinton's term saw that rate averaging around 4 percent.
The Bush administration increased the national debt during a time of crisis. The White House decided to cut taxes to stimulate economic growth after the dot-com bubble bust pushed the country into recession. It also ratcheted up spending to fight the war on terror and the war in Iraq.
Reducing taxes and increasing spending drives up the debt. It always has and always will.
Of course, government debt is nothing new for the United States. In 1791, our young government owed more than $75 million dollars to France and the Netherlands, according to the Treasury Department. Both countries had loaned us money to help finance the Revolution.
Wire services contributed to this report.