Budgeting isn't fun,but each of us has to at least consider what we are spending. Normally talking about debt is boring, but this is alarming:

The U.S. budget deficit for October surged to $176 billion, a record for the month, the Treasury Department announced today. During the month, the government racked up $311 billion in outlays compared with $135 billion in receipts. The October numbers mark the first month for the new fiscal year after the U.S. wrapped up the 2009 fiscal year that ended on September 30 with a record-high $1.4 trillion budget deficit due to increased government spending...

Yes, the government did a financial bailout. We are in a huge recession. If the government actually balanced the budget using October's numbers (spending 2.3 times what it's making?!? Is something wrong here?!?), we'd have a massive decrease in spending and a massive loss of programs and jobs. And yes, GW Bush lowered taxes and increased spending. And, yes, there's a couple wars going on. And yes, some of the spending, like an increase to the NSF, will reap long term rewards, economy-wise.

We're now spending about 8% of our government revenue on interest alone:





And this kind of deficit leads to this kind of debt interest servicing (GAO):



Watch the growing red box! This is percentage of revenue going to nothing of value to Americans. Not to health care. Not to the military. Not to the NSF. Not to Social Security. It goes solely to interest servicing. Yes, this is a pretty long term view. But we already waste 8% of U.S. revenue to interest. Eight percent is a lot of money that could have been used for something else . Remember that Einstein was amazed at how interest can take a little bit of saved money and make it so much bigger in time. Interest adds up exponentially in the opposite sense too (e.g. debt), so that eventually the US economy is dominated solely by interest servicing. By 2050, roughly 12% of the entire U.S. GDP would be spent on federal interest. 

How can this problem be changed? Well, simply either government income needs to be increased (taxes, fees, etc) or expenditures need to be reduced. In debt risk analysis, the CIA factbook lists the U.S. as #24, meaning that there are 23 countries with a worse debt/GDP ratio--but most of their numbers were pre-whole-hog recession, pre TARP, and pre stimulus. We could be on our way up the list.

Here's the White House's plan for the future and it is a pretty good read. But does it do enough? How can we say that we are going to improve the lives of Americans in the future when so much money will be reserved soley to interest-servicing? Future projections are projections, of course, and can be changed. Well, this is one thing that we need to change, and soon.

Sometimes I wonder what would happen if the Federal government was like most states, required to balance their budget year-by-year. Right now it would be a catastrophe. Ramona has a good post about job creation, and argues for some spending now to create jobs now to help the economy now and in the long run. Short term, I am not discounting that a Job Bill would be a better idea than TARP or the Stimulus was.

But we will have to think about, and soon, the long term effects of federal debt.

Update: I was throwing the acronym GDP around and I really meant U.S. government revenue. Edited.