Labor Law Guy

A Trillion Here, a Trillion There, and Pretty Soon We’re Talking Real Money

Posted in Random Musings by laborlawguy on February 19, 2009

The federal deficit for 2009 has already surged past the $1-trillion mark, supposedly for the first time in U.S. history, with the passage of the so-called stimulus plan optimistically named the American Recovery and Reinvestment Act of 2009.

But wait, the deficit for 2008, though officially announced as $455 billion, actually topped the trillion mark. How so? Because the feds simply counted money stolen from the Social Security trust fund, which paid for the other $600 billion or so in undisclosed debt, as an “intergovernmental transfer.” Cute trick, eh?

Actually, since our founding, the nation’s federal debt has been reduced to zero only once, and that was in 1835 under Andrew Jackson. In fact, the government entered that year with $440,000 in the treasury. (Bill Clinton claims to have balanced the yearly budget once, with a bunch of accounting tricks, but he came nowhere close to the Jacksonian feat of wiping out all government debt.)

It didn’t last long. By 1936, the nation had been plunged into a six-year-long depression, starting a cycle of national debt increases that hasn’t ended, or been paid off, till this day. Cause of that depression? Crash of the real estate market due to a bubble.

As Everett Dirksen once said, “A million here, a million there, and pretty soon you’re talking about real money.”

Substitute “trillion” for “million” to see what a fix we’ve gotten ourselves into.

(There is some historical dispute about whether Dirksen ever uttered that comment, but even if it’s apocryphal, it works.)

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