"The national debt increasing so fast that it is going to bury the U.S. dollar and wreck the economy, leaving nothing but a trail of inflation, unemployment, and a pile of worthless paper. We're going to default." – ALG President Bill Wilson
January 28th, 2010, Fairfax, VA—Americans for Limited Government President Bill Wilson today condemned the U.S. Senate for voting to increase the national debt ceiling by $1.9 trillion which would bring the national debt limit to $14.294 trillion if passed by the House.
"Not even 24 hours after Barack Obama called for a 'freeze' to bring spending under control, the Senate has voted to increase the national debt by almost $2 trillion," Wilson said. "Is this some kind of sick joke on the American people?"
"By increasing the national debt to $14.29 trillion, the Senate has voted to set the debt ceiling to be greater than the nation's entire Gross Domestic Product," Wilson added. The current GDP is $14.242 trillion, based on third-quarter data released by the Bureau of Economic Analysis.
The vote in the Senate was 60-39. Not a single Senate Republican voted for it. In December, Congress voted to increase the debt ceiling by $290 billion to $12.394 trillion.
"The national debt is increasing so fast that it is going to bury the U.S. dollar and wreck the economy, leaving nothing but a trail of inflation, unemployment, and a pile of worthless paper," Wilson said, adding, "We're going to default."
The national debt has grown for every year since 1958. "Eventually, the nation's creditors are going to figure out that we're never paying these debts back. They're not stupid — even though they're starting to wonder aloud if we are," Wilson said.
On Tuesday, urging the Senate to reject the debt increase, Wilson said the "real solution is to draw down entitlement spending, balance the budget, and pay off the debt."
According to an Americans for Limited Government analysis of Office of Management and Budget (OMB) data, annual entitlement spending has grown from $386.4 billion in 1992 (27.98 percent of budget outlays totaling $1.381 trillion) to $1.36 trillion in 2009 (38.17 percent of budget outlays totaling $3.653 trillion). (Sources: www.gpoaccess.gov/usbudget/fy10/pdf/hist.pdf, and http://www.whitehouse.gov/omb/asset.aspx?AssetId=1702.)
According to OMB data, entitlement spending as a percent of budget outlays will continue to increase, while defense spending will decrease. In 2019, OMB projects that entitlements spending will stand at $2.482 trillion (45.93 percent of outlays totaling $5.403 trillion).
Meanwhile, interest payments on the $12.3 trillion debt are set to increase drastically. According to the New York Times, "the White House estimates that the government's tab for servicing the debt will exceed $700 billion a year in 2019, up from $202 billion this year, even if annual budget deficits shrink drastically."
"The American people are not going to be able to keep up with the interest payments on the national debt when rates go up," Wilson noted.
Wilson recently said that the growth of the debt could be directly correlated and shown to be caused by the growth of entitlements. The national debt has grown by over 295 percent since 1992, and will have grown by over 492 percent by 2020. Entitlement spending has grown by over 351 percent since 1992, and will have grown by over 642 percent by 2020.
"Entitlement spending is the greatest contributor to the growth of the national debt because it is growing at an even faster pace than the budget as a whole. That means it is, without a doubt, the most uncontrolled, profligate, unaffordable and unsustainable portion of the budget," Wilson explained.
Currently, the national debt stands at over $12 trillion and is projected to top the Gross Domestic Product (GDP) in 2011 at over $14 trillion. By 2020, it will top $20 trillion.
"This is one of the most irresponsible votes ever in the history of the U.S. Senate," said Wilson.
Wilson called on the House to reject the bill, and Obama to veto it. "Not a day after Obama delivered his spending 'freeze' proposal, the Senate voted to increase the national debt by almost $2 trillion. If it passes the House, then Obama will sign it. He ought to veto it," Wilson concluded.