U.S. Federal Debt

In Feb. 2011, Bill O'Reilly interviewed President Obama.  He asked the president, "Is Federal spending getting out of control."  Obama's answer, "If you look at Federal spending as a percentage of Gross National Product (GNP) then we are at spending levels similar to the Eisenhower administration."  The White house published a graph which shows this is the case; however, if you look at the data from the U.S. Treasury Dept., and the Commerce Dept. you get a different picture for the last ten years.  Below is the graph form the U.S. Treasury & Commerce Dept.  

Fed Debt as percentage of GNP
As you can see from this graph, Federal spending before the Hoover administration was never above 40% of GNP.  You will also note that until 1913 there was no Federal Income Tax.  In 1913 the Federal Reserve System was established and in that same year the first Income Tax was placed on the citizens of America.  Since that time Federal spending has grown.

In the Socialist countries of Europe the people are taxed at 55% to 70% of their income to support government programs which include health care, retirement pensions and government run industries.  In Communist countries the government controls all businesses and the people get hand outs to keep them going, but the people really own nothing.  When government spending is 100% of GNP, we are really looking at a government that takes everything that is produced and starts to feel like a Communist run country.  In 2010 Federal spending was at 95% of GNP and rising rapidly.  We are not taxed as high as Europen countries because the Federal government borrows money from other countries and prints more dollars which lowers the value of our dollars, and thus products continiously cost more.  This is a hidden Tax.  If you don't get a pay raise to keep up you fall behind and really have a pay cut.

Here is the White house graph.  This chart is identical to the above chart until year 2001.  Which is the real chart?  Who is telling the truth?  You can decide.
White House Chart

From time to time the government changes how it counts things.  For instance, the government no longer counts gasoline and food prices in its index of cost of living.  Therefore Social Security has been frozen because the government does not see the cost of living as rising!  Is it possible the White House changed what they were counting as Federal spending in 2001?  

In 1913 the Federal Reserve System was formed which is a privately held Banking System.  Thomas Jefferson warned us about Private Banks with this statement:
If the American People ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and the corporations which grow up around them will deprive the people of all property until their children wake up homeless on the continent their fathers conquered.

If you want to learn more our Federal Debt and the role the Federal Reserve plays in this, I suggest you visit
 Secrets of the Federal Reserve.  There are several videos on this page you can watch. 

And listen the the audio, The Creature from Jekyll Island by G. Edward Griffin.  


April 2011