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Has skyrocketing government debt become the norm in the U.S., and how serious is the problem?

Stuart Veale

Video Transcript

Twenty years ago, we were aghast! Aghast, that we had a 50 billion dollar deficit. Remember, George Bush 1 broke his no new taxes pledge because the deficit was going to exceed 120 billion dollars. It was absolutely inconceivable. He knew that was going to be devastating and broke that pledge because he couldn't stand seeing the deficit go over 120 billion. We have months now where we run up 120 billion dollars in debt. In a few short years, I'm not necessarily blaming Obama because he got dealt a terrible hand to play, but the net result is that our debt has doubled. We're 17 trillion dollars in debt on the books. Then if you count the agency debt: Fanny Mae, Freddie Mac, Federal Home Loan Bank, Federal Farm Credit Bank, add up all their debt; that's another 10 trillion dollars. Now, in the private sector, if you guarantee debt you have to put it on your balance sheet. In the public sector, the government has guaranteed the agencies' debt, but still hasn't put it on the balance sheet. Meaning, anyone who does what the government does accounting wise in the private sector, would go straight to jail. So it really isn't 17 trillion, it's 27 trillion, is the debt that we're looking at. Of course that excludes all the entitlements, Social Security, Medicare, Medicaid, which has their own well-documented problem.

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