Increases in federal debt over the last four years have no precedent in history, according to a new report by the Government Accountability Office (GAO), as the federal debt limit has increased 55 percent since fiscal year 2007.
“The increases to total federal debt over the past 4 fiscal years represent the largest dollar increases over a 4-year period in history,” the GAO noted. Public debt equaled $5.049 trillion in September 2007, with another $3.944 trillion in intragovernmental debt (money borrowed by the government from programs such as the Department of Defense Medicare-Eligible Retiree Fund). As of September 2011, public debt has more than doubled to $10.127 trillion, as the federal government spent more money than it takes in from taxpayers. Intragovernmental debt increased to $4.654 trillion over that same time frame.
This increase in government spending harms the economy, according the GAO. “Debt held by the public represents a burden on today’s economy,” explained report author Gary Engel GAO director of Financial Management and Service, “as borrowing from the public absorbs resources available for private investment and may put upward pressure on interest rates. ” He added that the payment of the interest on public debt “represents a burdent to current taxpayers.”
Engel also warned that “GAO’s recent long-range federal budget simulations continue to show an unsustainable fiscal path driven by a structural imbalance between revenues and spending for major entitlement programs.”
