GAO: US national debt approaching 100% of GDP

An auditor for the Government Accountability Office told the Senate budget committee that in the next 15-25 years, the amount of public debt will exceed all the goods and services produced by the entire U.S. economy. 

Without action on the debt, the auditor said the percent of debt to GDP could rise to 200% or 300%.

Washington Free Beacon:

Gene Dodaro, the comptroller general for the Government Accountability Office, testified at the Senate Budget Committee to provide the results of its audit on the government’s financial books.

“We’re very heavily leveraged in debt,” Dodaro said. “The historical average post-World War II of how much debt we held as a percent of gross domestic product was 43 percent on average; right now we’re at 74 percent.”

Dodaro says that under current law, debt held by the public will hit a historic high.

“The highest in the United States government’s history of debt held by the public as a percent of gross domestic product was 1946, right after World War II,” he said. “We’re on mark to hit that in the next 15 to 25 years.”

Another economic projection which assumes that cost controls for Medicare don’t hold and that healthcare costs continue to increase, shows debt rising even further.

“These projections go to 200, 300 percent, and even higher of debt held by the public as a percent of gross domestic product,” said Dodaro. “We’re going to owe more than our entire economy is producing and by definition this is not sustainable.”

And it isn't only overspending that's at fault.  The auditor found an astonishing $136 billion in improper overpayments that were made in just one year.

All of these conclusions are based on government financial statements.  But the GAO is questioning how accurate those statements are:

The audit also called into question the reliability of the government’s financial statements. According to the report, if a federal entity purchases a good or service, that cost should match the revenue recorded by the federal entity that sold the good or service. The report found that this was not always the case and found hundreds of billions of dollars in differences between transactions between federal entities.

“The government-wide financial statements that the GAO audits tell us what came into the government’s coffers and what went out, what the government owns and what it owes, and if the operations are financially sustainable,” said Sen. Mike Enzi (R., Wyo.). “But can we trust the information in the statements?”

“GAO’s audit calls into question the reliability of the underlying financial data,” he said. “The sketchiness is such that GAO remains unable to even issue an audit opinion on the government’s books.”

Gee.  Are they saying the feds cook their own books?  Who woulda thunk it?

Unmanageable, unsustainable, unreal – choose your adjective, because they all describe our debt.  In the near future, that debt will inevitably lead to an economic disaster.  And as long as the voices that say the debt doesn't matter, or the situation isn't that dire, continue to be heard in Washington, very little will be done to save us from catastrophe.

An auditor for the Government Accountability Office told the Senate budget committee that in the next 15-25 years, the amount of public debt will exceed all the goods and services produced by the entire U.S. economy. 

Without action on the debt, the auditor said the percent of debt to GDP could rise to 200% or 300%.

Washington Free Beacon:

Gene Dodaro, the comptroller general for the Government Accountability Office, testified at the Senate Budget Committee to provide the results of its audit on the government’s financial books.

“We’re very heavily leveraged in debt,” Dodaro said. “The historical average post-World War II of how much debt we held as a percent of gross domestic product was 43 percent on average; right now we’re at 74 percent.”

Dodaro says that under current law, debt held by the public will hit a historic high.

“The highest in the United States government’s history of debt held by the public as a percent of gross domestic product was 1946, right after World War II,” he said. “We’re on mark to hit that in the next 15 to 25 years.”

Another economic projection which assumes that cost controls for Medicare don’t hold and that healthcare costs continue to increase, shows debt rising even further.

“These projections go to 200, 300 percent, and even higher of debt held by the public as a percent of gross domestic product,” said Dodaro. “We’re going to owe more than our entire economy is producing and by definition this is not sustainable.”

And it isn't only overspending that's at fault.  The auditor found an astonishing $136 billion in improper overpayments that were made in just one year.

All of these conclusions are based on government financial statements.  But the GAO is questioning how accurate those statements are:

The audit also called into question the reliability of the government’s financial statements. According to the report, if a federal entity purchases a good or service, that cost should match the revenue recorded by the federal entity that sold the good or service. The report found that this was not always the case and found hundreds of billions of dollars in differences between transactions between federal entities.

“The government-wide financial statements that the GAO audits tell us what came into the government’s coffers and what went out, what the government owns and what it owes, and if the operations are financially sustainable,” said Sen. Mike Enzi (R., Wyo.). “But can we trust the information in the statements?”

“GAO’s audit calls into question the reliability of the underlying financial data,” he said. “The sketchiness is such that GAO remains unable to even issue an audit opinion on the government’s books.”

Gee.  Are they saying the feds cook their own books?  Who woulda thunk it?

Unmanageable, unsustainable, unreal – choose your adjective, because they all describe our debt.  In the near future, that debt will inevitably lead to an economic disaster.  And as long as the voices that say the debt doesn't matter, or the situation isn't that dire, continue to be heard in Washington, very little will be done to save us from catastrophe.