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The Vital 6 U.S. Government Debt & Political Facts to Know Interpret & Understand in 2012
© Donald Reinhardt, April 12, 2012
Regardless of where anyone stands within the U.S. political spectrum, there are 6 things to really know and understand about the U.S. economy.
Passing on the debt to the next generations is not a good solution to mountains of debt. Cartoon Credit:

Important U.S. government facts that must be known and understood

Nothing is simple or easy when you overspend and get into debt. The U.S. government has overspent. Spending and debt has reached dangerous and excessive levels on behalf of all citizens – young and old, living now and to be born over many future decades.

1.      The U.S. spending budget must be cut. According to the US Treasury report the U.S. is a highly-indebted nation and the American people and its government are approaching 16 trillion dollars in debt and moving forward at an unabated pace. Think of someone with a personal income $24,000/yr who is spending $48,000/yr and has a real debt of $ 240,000. How do you reduce that amount of increasing debt with that income? That is the type dilemma faced on a masssive scale by the U.S. government and its citizens.

2.      Baseline budgeting and major budget reduction must be done soon, not later. The U.S. Federal budget increases each year with built-in automatic add-ons of 5 to 8%. Just think if your personal budget spending increased 5 to 8 % on each item in your budget while your income was fixed or  was actuallydecreasing. Does that make sense? Of course not, yet that is what the U.S. government is doing and continues to do for over the last 3 years.

3.      The U.S. Democrat-party-controlled Senate has not passed a budget for 3 years and has relied on continuing resolutions based on the last approved, elevated costs and excessive 2009 budget. Why is this so? Harry Reid the Majority Leader in the Senate has blocked all new budgets and does not want any budget cuts without major tax increases and, of course, any new taxes are opposed by Republicans who fear further economic stagnation. One solution would be to require that there be a constitutional obligation and responsibility to pass a balanced budget. If taxpayers and citizens in large numbers demanded this, then this might come about. A simpler first step is the removal at election time of all those legislators in the House and Senate who oppose passing balanced or reduced spending bugets.  Sensible and reduced budgets are needed to correct the financial maelstrom and disaster that is brewing as the debt clock continues to race forward.

4.     Medicare, Medicaid, Food Stamp and other program fraud amounts to hundreds of billions of dollars each year. Relative to the amount of money lost and the amount of recovery and prevention occurring very little is being done to control this despite advertisements and commentaries to the contrary from time to time.

5.      The Student Loan federal-guaranteed loan program debt currently amounts to almost one trillion dollars of debt and rising. To put these data in perspective, government-guaranteed student loan debt now exceeds all current personal U.S. credit card and car payment debt. Many students have individual debt of 10, 20, 50 or even 100 or more thousand dollars and graduating students cannot find or get worthwhile jobs in many cases. These students live at home with their parents, grandparents or other relatives and are waiting for things to improve. When will that happen? Who knows? What does this debt mean? There will be mounting interest costs here for the debtors and the U.S. government. The government is not receiving adequate loan repayments while obligating even more money to a faltering and unstable student loan program. As another important example, the Federal government is also the major holder and guarantor of home mortgage and property loans  as reported by the Board of Governors of the Federal Reserve System. Fannie Mae and Freddie Mac and related programs are part of these programs and these are in deep financial trouble and require more money from the U.S. government.

6.       The Affordable Health Care Act (aka Obamacare) is an example of another and even more serious budget-busting program and law. The 2008-2010 U.S. Congress passed a law of 2400 pages that was not read by any of the members of that Congress who voted to pass this healthcare law. Further, this bill authorized 500 billion dollars to be taken from one part of Medicare services for the elderly and placement of this same money in a fund  to service 30 million new, non-elderly people now added to Medicare and U.S. Healthcare. Speaker Pelosi said "we have to pass it to know what is in it." Regardless of your political views, is this a wise course of action for any law-making body? Nevertheless, the Democrat U.S. Senate and House passed this abomination and then mandated, i.e. required, citizens to purchase healthcare insurance if they did not have it. This program is an unaffordable, budget-breaking act which will dramatically add government bureaucracy and inefficiency along with massive new US. debt of 100s of billions of dollars over the next ten years. The law is under constitutional review in the U.S. Supreme Court and a decision is expected by the nine justices in June, 2012.


Find the truth and real facts wherever those truths and facts can be found. Yes, this is easier said than done because all news organizations have their political biases. There is a need for true, honest and faithful reporting and fact-checking.

Six basic actions for debt reduction for the U.S government and its citizens

1.       All must learn, understand and remember the true and complete facts of the U.S. debt, budget and economy and determine what is factual and truthful and what is fantasy.  Who is truthful, who is lying, who is misguided or wrong and who really is working to solve the debt crisis are other important questions seeking answers. 

2.      Baseline budgeting must stop. We need to eliminate automatic U.S. budget increases and institute baseline budgets where every area of the budget is re-evaluated and budgeted  more wisely and correctly each year based on true priorities.

3.      To prevent budget inertia, stagnation and budget passage failures require yearly budget votes and approvals by both houses. Pass a constitutional amendment which obligates Congress to pass a balanced budget each fiscal year. Until that time voters need to remove any and all Senators and House members who oppose passing a budget of any sort. Such actions are required to correct the financial maelstrom and disaster that is brewing as the debt clock continues to race forward.

4.      Elimination of fraud and waste in many areas of federal activity and financing is essential. Reduce and eliminate government fraud in Medicare, Medicaid, Food Stamps and dozens of other programs by appointing and assigning fraud inspectors and budget detectives to major specific critical government areas. Citizen report groups, watchdogs and overseers also can be enlisted to help expand fraud detection  and increase the ability of the federal government to catch and prosecute fraudulent people and activities whenever and wherever they occur.

5.      Certain government programs must be eliminated or reduced significantly. Guaranteed home mortgage entities such as Fannie Mae and Freddie Mac and student loan programs stand out as immediate areas that must be significantly downsized or curtailed.

6.      Affordable Health Care Act is a misnomer in more ways than one. Nevertheless, it is important to remember that doctor and patient interaction without government or insurance company intervention is the best and ideal situation. We should permit any and all citizens and patients who want to opt out of Medicare to do so. Permit patients to negotiate and pay for their medical care directly. Establish insurance cooperatives and reduce medical liability and excessive testing that is so expensive and done to protect against medical liability.
      There is much to do and little time to do it right.

Everyone must learn, understand and remember the true and complete facts of the U.S. debt, budget and economy and everyone must determine who is telling truth and who is not and who really is working to solve the debt crisis. We can neither spend nor tax our way out of this debt crisis –we must cut our way out of the debt crisis and cut deeply with some pain for everyone. Yes, we must eliminate tax loopholes, make the tax system fairer and more equitable but, ultimately, the U.S. needs major financial and debt surgery and the sooner the best surgery begins and gets done the better! Financial cancer and its treatment cannot be delayed!

Sources and Resources for Fact Checking

Board of Governors Federal Reserve System. 2012. Mortgage Debt Outstanding.

Desjardins, Lisa. 2012. Why the U.S. may never have a balanced budget again. Accessed 12 April 2o12.

Sullivan, Andrew. 2012. The Student Debt Disaster. Accessed 12 April, 2012.

The U.S. Debt Clock

US Treasury. 2012. Debt to the Penny and Who Holds It. Accessed 12 April, 2012.