Obama’s Even Riskier Debt

The estimable Robert Samuelson of the Washington Post had a must-read column yesterday titled “Obama’s Risky Debt.” Samuelson writes that the administration is projecting a total of $7.1 trillion in additional publicly-held debt over the next ten years, on top of $1.8 trillion for this year alone. (The Congressional Budget Office, less enthralled by the allures of Rosie Scenario, projects the additional debt will be $9.3 trillion). Today’s publicly-held debt is $6.3 trillion. Thus, using the CBO figures, in ten years the publicly-held debt will total $17.4 trillion, 270 percent of the current debt.

That’s about the same as the percentage increase in the national debt from 1930 to 1940, when the country underwent an economic crisis orders of magnitude more severe than the current one. And in 1930 the total national debt was only about 15 percent of GDP, not the 40 percent that the publicly-held debt is today. [snip]

How that will play out is anyone’s guess, but it will be ugly, to put it mildly. The Republican Party, however, has a great opportunity here if it has the political machismo to take advantage of the situation. The Democrats own the government and therefore they own these numbers.

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