Beam: Take closer look at US debt

By By Jim Beam / American Press

A Beaumont, Texas, talk radio host

caught my attention Friday when he threw out some interesting facts

about this country’s

$17.2 trillion national debt. The day after Congress reopened the

government and suspended the debt limit, the increase totaled

$328 billion, the largest one-day increase on record.

The numbers are so unimaginable we tend to turn our thoughts to issues over which we have some control. However, there are

1,800 federal employees in Parkersburg, W.Va., who do manage our debt. They operate out of the Bureau of the Public Debt.

I suppose you could call them our nation’s bankers.

The bureau’s job is to borrow money the country needs to operate the federal government and to keep track of the debt. It

also makes $415 billion a year in interest payments.

I was curious about where that talk

radio guy was getting his information since he occasionally likes to

comment on the declining

influence of newspapers. And just as I suspected, he got the

national debt tidbits from a story in USA Today. Talk show hosts,

some bloggers and others who love to deride newspapers would have a

difficult time surviving without content from newspapers,

but that’s another story for another day.

So, let’s get back to the national

debt. To whom do we owe the money? Much of it we owe to ourselves, but

also tidy sums to

Social Security and foreign investors. We owe China, our biggest

creditor, $1.3 trillion. Japan comes in No. 2 at $1.1 trillion,

according to figures compiled by the Washington Post. We owe 15

other countries debts ranging from $28.7 billion to the $256.4

billion owed to Brazil.

The national debt when Bill Clinton

left office was $5.6 trillion. It climbed to $10.6 trillion during the

two terms of George

W. Bush, and President Obama made that increase a major campaign

theme that helped propel him into the White House. You don’t

hear much from the president these days now that the national debt

has grown to over $17 trillion.

The Post said the more telling statistic is when debt is expressed as a percentage of the overall U.S. economy (the gross

domestic product or GDP).

Before Ronald Reagan took office in 1980, the debt was 33 percent of the GDP. It went down only once (during Clinton’s two

terms). President Obama has achieved his own unique record. The debt during his five years has climbed from 77 percent to

105 percent of GDP, and he has three more years to go.

One of the more interesting parts of that USA Today story had to do with the debt this country owes to the Social Security

Trust Fund. Parkersburg is also home for that fund.

As we have heard so often, the trust

fund exists only on paper. The newspaper said the balance is kept

electronically, but

a 1994 law requires that the Treasury maintain a “paper

instrument” as evidence the government is borrowing from Social

Security.

In order to fulfill that requirement, about $2.7 trillion in Social Security IOUs is contained in a single three-ring binder.

It is kept in a locked vault, which is an oversized filing cabinet with a combination lock.  

The government has also borrowed more than $5 trillion from various pension funds and trust funds to pay for ongoing expenses.

ABC News reported a rare event back in

April. It said for the first time since 2007 the U.S. Treasury was

planning to make

a $35 billion down payment on the federal debt. It happened

because the budget deficit had been shrinking more than expected.

You can’t read that USA Today story and not wonder how in the world the Bureau of the Public Debt ended up in Parkersburg,

W.Va., a town of 31,492 citizens. The bureau is the city’s largest employer.

President Eisenhower in 1954 wanted to relocate vital government functions away from Washington, D.C., in the event of a nuclear

attack. Parkersburg is 300 miles away, about halfway between Washington and Chicago, where most of the bond processing was

done.

The late U.S. Sen. Robert Byrd,

D-W.Va., was elected in 1959 and eventually became chairman of the

Senate Appropriations Committee.

In 1975, he had the Chicago office moved to Parkersburg. Byrd also

moved almost everything else in Washington that wasn’t

nailed down to his home state.

That’s the way things work most of the time in the nation’s capital. Powerful members of Congress keep unnecessary government

facilities and contracts operating in their home states. All of that only increases the nation’s liabilities.

Congress will have to deal with the nation’s debt one of these days because the Social Security, Medicare, pension and other

bills will be coming due. Either the debt will keep increasing, which is risky, programs will have to be cut or new taxes

will have to be passed.

None of those are desirable alternatives. But it’s like that famous 1972 Fram oil filter commercial said, “You can pay me

now or pay me later.”

    • • •

Jim Beam, the retired editor of the American Press, has covered people and politics for more than five decades. Contact him at 494-4025 or jbeam@americanpress.com