A lot of the federal budget conversation these days has to do with how to avoid the chances of another debt ceiling impasse. Too bad the nation isn’t in a completely clear-eyed way about just how bad the public-debt situation is.
Here are three charts, in the context of this week’s public-debt increase, that help explain why:
As noted on the right side of the chart, which charts the difference between today’s debt and the total amount of borrowing that we’ve agreed to the future, the country owes far more now than it needs to. For a variety of reasons, some of which have nothing to do with Washington politics (such as aging demographics), the government can’t borrow as much as it needs to. It’s like an annual bill that keeps accumulating beyond the ability of a borrower to pay it.
The left side of the chart compares today’s debt to that of the period that predates the Great Recession, though in inflation-adjusted terms this deficit is actually worse than it was in 2000. This means that during the past decade or so, when America’s financial situation was at its worst, its debt grew far faster than the nation could ever count on in the future. For now, the debt that we’ve agreed to in the future will remain (for now) more than 30 percent lower than it was in 2000. It shouldn’t, and won’t be sustained.