Bernanke Running Amuck (reblog) re: printing new money

Very nice find Robert . . . our government now spending about 40% more than it takes in.  Even a dummy like me can figure out we can't keep going on with that.

According to Wikipedia:

The United States has had public debt since its inception. Debts incurred during the American Revolutionary War and under the Articles of Confederation led to the first yearly reported value of $75,463,476.52 on January 1, 1791. Over the following 45 years, the debt grew, briefly contracted to zero on January 8, 1835 under President Andrew Jackson but then quickly grew into the millions again.

The first dramatic growth spurt of the debt occurred because of the Civil War. The debt was just $65 million in 1860, but passed $1 billion in 1863 and had reached $2.7 billion following the war. [My note: Lincoln was a Republican.] The debt slowly fluctuated for the rest of the century, finally growing steadily in the 1910s and early 1920s to roughly $22 billion as the country paid for involvement in World War I.

The buildup and involvement in World War II plus social programs during the F.D. Roosevelt and Truman presidencies in the 1930s and '40s caused a sixteenfold increase in the gross debt from $16 billion in 1930 to $260 billion in 1950. After this period, the growth of the gross debt closely matched the rate of inflation where it tripled in size from $260 billion in 1950 to around $909 billion in 1980. Gross debt in nominal dollars quadrupled during the Reagan and Bush presidencies from 1980 to 1992 [Commenter's note: Reagan and Bush were Republicans]. The Public debt quintupled in nominal terms. In nominal dollars the public debt rose and then fell between 1992 and 2000 from $3T in 1992 to $3.4T in 2000. During the administration of President George W. Bush, the gross debt increased from $5.6 trillion in January 2001 to $10.7 trillion by December 2008 [Commenter's note: Bush was a Republican], rising from 58% of GDP to 70.2% of GDP. During March 2009, the Congressional Budget Office estimated that gross debt will rise from 70.2% of GDP in 2008 to 100.6% in 2012.

Just like individuals who use credit to buy things today and pay for them tomorrow, it's the only way the government can do it, too, since everyone wants good streets, lots of firefighters, police, and ambulances, but no one wants to pay taxes for all those things.