The 21st Century Monolith

From William Buckler, Author of The Privateer

The 21st Century Monolith

For all intents and purposes, there have been two US Presidents thus far in the 21st century - George Bush (the younger) and Barack Obama. If we take Mr Bush’s two terms to cover fiscal 2001 to fiscal 2008, the total rise in official Treasury funded debt over that period was $US 4.350 TRILLION. If we take Mr Obama’s first term to cover fiscal 2009 to fiscal 2012, the rise over four years was $US 6.050 TRILLION. Add the two together and you get a grand total of $US 10.4 TRILLION. That’s almost two thirds (65 percent) of the total funded debt of $US 16.066 TRILLION as of September 28, 2012.

An American celebrating his or her 100th birthday this year - and quite a few will be - was born at a time when the TOTAL debt of the US Treasury was $US 2.8 Billion. In fiscal 2012, the US Treasury borrowed that amount in about 19 hours. An American celebrating his or her 50th birthday was born at a time when the funded debt of the US Treasury was $US 300 Billion. In fiscal 2012, the Treasury borrowed that amount in less than three months. An American celebrating his or her 12th birthday today was born at the beginning of the 21st century. That person doesn’t have much to celebrate, given the fact that almost twothirds (65 percent) of the total funded debt of the US Treasury has been amassed in their lifetime.

Here is a very simple observation which goes to the root of the entire global monetary morass of the 21st century. An American celebrating their centenary in 2012 was born into a nation of just over 95 million people. A newborn American is being born into a nation of just under 313 million people. One hundred years ago, the US had a bit less than one-third of its current population. How did it function with a TOTAL government debt of $US 2.8 Billion? Today, that same government is running a funded “tab” of more than $US 16,000 Billion and a total “tab” (including UNFUNDED liabilities) of well over $US 200,000 Billion? In fiscal 1912, total Treasury debt increased by $US 10 million or a bit less than ten cents per capita. In fiscal 2012, funded Treasury debt alone increased by $US 1,276,000 million or a bit less than $4,100 per capita. The unfunded debt increased much more than that. These numbers are grotesque.

Forget any questions about how is this possible. The relevant question is why is this deemed “necessary”. The US and every other government in the world has been building its “fiscal cliff” for 100 years. Its face has been steadily steepening all that time. But in the 21st century, what was a mere mountain has become a monolith of almost incalculable proportions. In less than three presidential terms of office, $US 10.4 TRILLION has been added to the Treasury’s funded “tab”. At the rate of expansion over the 12 years since the turn of the century, another 12 years would see the funded debt blow out to $US 26.5 TRILLION by 2024. If we project the rate of expansion over Mr Obama’s one term as president for the next 12 years, the total by 2024 would be $US 34.2 TRILLION.