Reason #20: Governomics - Spending Like There’s No Tomorrow

Instead of cutting spending as promised, the Bush Administration greatly expanded the federal bureaucracy. Nearly every category of government spending grew like a weed on his watch. And the war in Iraq, which was supposed to cost a pittance (and be offset by Iraq’s oil revenues), will cost U.S. taxpayers $3 trillion by the time it ends. That is, if it ever ends. Unfortunately, George W.’s free spending is not an aberration. Spending has gone up under all our recent presidents, even after adjusting for inflation. Since the 1960’s and Lyndon Johnson’s “Guns and Butter” spending on Vietnam and his Great Society programs, we’ve been addicted to debt as a nation. But now the bill is coming due.

As any credit card user knows, the deeper into debt you sink, the higher your interest payments go. And the national debt is nothing but a giant credit card bill for the U.S. taxpayer. In 2007, we paid out more than $400 billion in interest payments alone and that price tag is only going up every year. We get no services, no benefits, nothing from that money. It just flies out the door and never comes back. Consider this: the federal government spends less than $70 billion a year on education. That means interest payments on the national debt get almost six times as much funding from Washington as our children’s schools do.

We used to say we owed the debt to ourselves … now we can’t even say that anymore.

Worst of all, we used to be able to say we owed the national debt to ourselves; that whenever the Treasury Department sold a new batch of Treasury Notes, or T-Bills (government bonds) to cover the rising tide of red, most were at least bought by American investors-but now we can’t even say that anymore. Foreign investors now own more than 80 percent of recently printed U.S. bonds. And many of these investors aren’t individuals, they’re governments–and many of them aren’t exactly our friends. China’s communist regime alone owns over $500 billion in treasury notes. Yet another example of our shift from a lending nation to a debtor nation.

NEXT: Reason #21: The Fallacy of the CEO President